U.S. markets open in 4 hours 58 minutes

Scooter Giant Lime Preparing Layoffs as Rider Numbers Collapse

Nate Lanxon and Candy Cheng

(Bloomberg) -- Scooter-sharing service Lime is considering further cuts to its workforce in the U.S. as sales and scooter trips plummeted with the coronavirus pandemic.

The management is considering cutting between 50 to 70 people, primarily at its San Francisco headquarters, according to a person with direct knowledge of the situation who didn’t want to be named discussing sensitive information. No decision has yet been made and discussions are still ongoing, the person said.

As recently as January, Lime had about $50 million of cash. But with a monthly burn rate of about $22.5 million, and factoring in revenue generation for the year to date, the person estimated Lime had about 12 weeks left before running out of money.

A spokesperson for Lime declined to comment. Chief Executive Officer Brad Bao said in a blog that the company will wind down and pause services in a number of markets across Europe, the U.S., Israel, Brazil and Sydney. It’s also monitoring markets including New Zealand, South Korea, calling the outbreak “an unprecedented challenge” for the cities and communities it serves.

The impact of global self-isolation measures and government bans on travel have decimated Lime’s ability to make money 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 started going into lockdown, those trips shrunk by almost two thirds to about 52,000 three days later. During that time, Paris, its biggest single market at the time, plunged 98% to just over 300, making it a smaller market than locations such as Wrocław in Poland and Corpus Christi, Texas.

That took a toll on revenue. Within those three days, daily global gross revenue for scooter rides slumped to just $192,593, down 69% from $617,383.

It’s expected to get worse as U.S. states, including California and New York, have asked residents to stay home, leaving scooters unused.

Lime had already slashed its workforce in January. The mood among managers was that this had been a difficult but necessary decision to allow Lime to put itself on a stable trajectory, another person said.

But the coronavirus outbreak had been so impactful on the company’s operations that it forced the firm to make further concessions that otherwise wouldn’t have been necessary, the person said.

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.