Scooter Startup Lime Is Cutting as Many as 190 More Workers
Scooter Startup Lime Is Cutting as Many as 190 More Workers
(Bloomberg) -- Scooter-rental startup Lime plans to terminate jobs across the U.S. and Europe this week, said people familiar with the matter, the latest sign of trouble for sharing-economy businesses reeling from the coronavirus pandemic.
The cuts will affect as many as 190 workers, some of whom have already been informed of their dismissal, said one of the people, who asked not to be identified discussing personnel matters. Management elected to expand an earlier plan to eliminate 50 to 70 jobs as it became clear the virus poses a prolonged threat to the business.
Over the past three weeks, about 10 jobs were terminated in Europe each week, the person said. Some 60 people in Europe will have lost their jobs by Friday, the person said, along with 130 in the U.S. The San Francisco-based company plans to hold a video conference with employees to discuss the dismissals on Friday, the people said. A spokeswoman for Lime declined to comment.
In the last few years, venture capitalists have invested more than $1 billion in two startups offering electric scooters on city sidewalks for rent through a mobile app. The runway for those companies, Lime and Bird, began to run short this year, first as investors looked to prioritize profitable business models and then as the virus broke out. Lime said in January it was cutting 14% of staff, about 100 employees, and retreating from a dozen markets in a drive toward profitability. Bird also cut staff recently, according to news website the Verge.
In March, Bloomberg reported that global self-isolation measures and government bans on travel had decimated Lime’s ability to generate revenue from the hundreds of thousands of scooters it has around the world. On March 14, for instance, the company recorded about 147,000 scooter trips being made globally, according to internal documents seen by Bloomberg. As cities across Europe went into lockdown, those trips shrunk by almost two-thirds to about 52,000 three days later. Paris, Lime’s biggest market at the time, plunged 98% to just over 300, making it a smaller market than locations such as Wrocław, Poland, and Corpus Christi, Texas.
The scooter companies are suffering from a sharp decline in transportation spending and a newfound aversion to the tenets of the sharing economy. This combination of factors is also weighing heavily on Airbnb Inc., Getaround Inc., Lyft Inc. and Uber Technologies Inc. Lyft said Wednesday that it’s cutting 17% of its workforce.
©2020 Bloomberg L.P.