The wild, unprecedented and totally unanticipated changes that the pandemic has wrought means every business has to ask itself tough questions if it wants to survive, Lime Chief Financial Officer Andrea Ellis told Karen Webster in a recent conversation.
“I think COVID has forced all businesses to be really focused on maintaining cost discipline,” Ellis told Webster.
She said that in the case of Lime, a well-known company that rents electric scooters and bikes to consumers in urban areas, the pandemic has refocused its goals quite directly. Lime wants to be the first micro-mobility company to be profitable for the full year as of 2021.
That’s a rather ambitious goal given the wild ride that 2020 has been thus far. Ellis said COVID-19 has “fundamentally changed the profitability model of our business.”
She said the firm has had to apply cost discipline not to a single business bucket, but across the firm’s entire profit and loss (P&L) structure — locations, labor, equipment, corporate expenditures and more. Ellis said everything is on the table because it’s all relevant to Lime’s future profitability picture and ultimate corporate destination.
“Our mission is to own all trips under five miles,” she said.
The Changing Uses of Micro-Mobility
Lime’s pre-pandemic scooter business operated in more than 100 cities worldwide, bucketed into three main categories.
The first were commuters who used Lime scooters to get to and from work or to close the “first-and last-mile” piece of their commutes from another transportation source. The second bucket involved tourists who used Lime scooters as a tool to better enable sightseeing trips. A third, smaller bucket consisted of consumers who used Lime scooters for urban non-commuting travel like trips to the store or other local destinations.
However, Ellis said that in the post-pandemic world, not surprisingly, Lime has seen a notable decline in the first two categories — but a rather large pick-up in that third group.
“What we're seeing a lot of now is these local trips to just explore your own city,” she said. “You just want to get outside, and this is a fun way to do it.”
Fun, she noted, and in many cases also safer feeling, since Lime scooters are an open-air method of transportation. Ellis said that beats traveling around crowded urban areas via buses or subways.
She said Lime cleans its scooters and bikes in house and relies on users being good citizens about hygienic use and wiping down the devices, which is what the firm has seen from its user base thus far.
And Ellis added that what Lime is also seeing is growth — a lot of it. Micro-mobility was already expanding before the pandemic, but the crisis has pushed down on the accelerator notably — and pushed Lime to think about serving an expanding global market.
Meeting Consumers’ Post-Pandemic Ridership Needs
Lime already serves 100 cities worldwide with scooter rentals, plus 10 more with electric bikes following its recent acquisition of micro-mobility firm Jump from Uber.
But Ellis said the company is very much eying expansion. She said that for all Lime’s progress with scooter rentals, major metros like New York and London still don’t have them. And she said the firm’s eBike offerings are still in their most nascent stages.
However, the fundamental question when approaching growth — both within currently served cities and potential new locations — is whether Lime can expand profitably.
“The bar that we must have whenever we enter into any market is, ‘Can it be profitable?’ And not just for seasonably favorable months, but for the full year,” Ellis said.
Lime also has to have an eye on how the firm benefits its ridership beyond just the actual transportation part of the ride. That’s why the company has expanded into subscription offerings.
Its various subscription products allow users to purchase passes for a full day, for unlimited rides during a certain time period or even for a bulk offering of a specific number of minutes at a discounted price. Ellis said the goal is to build out Lime as a flexible, reliable service that riders can depend on precisely how and when they want to use it.
Lastly, she noted that building the company for rider needs usually means engaging with local governments for input on the municipality’s goals.
“An example would be in Chicago where one of the things they have going on is a really big focus on the city-designated equity zone,” Ellis said. “That gave us an opportunity to bring access to micro-mobility in places that maybe don't have access to the same degree of public transportation that exists in other parts of the city. So, over half of our fleet in Chicago is deployed in these equity zones.”
The goal is to serve riders in as many ways as possible. Ellis said that often means stepping back and asking local officials one all-important question: “Where can we be helpful?”
The road ahead as the world recovers from the pandemic won’t be easy, Ellis noted. Like every other firm in the world, Lime has to think carefully and strategically about its every move since the situation on the ground changes differently in different regions.
But Lime is also riding into the future more optimistic than worried about what’s on the road ahead.
“When we look at the future, we're very encouraged by what we are seeing in a post-COVID world,” Ellis said. “We do feel we have the ability to scale this business profitably. So, we're very encouraged by the fundamental trends that we're seeing in our business in terms of being on that path to profitability next year.”