E-scooter company Lime cofounder and CEO Brad Bao comes to meet us in the heart of Tel Aviv on his electric scooter, of course. He has come to Israel for 36 hours and has such a tight schedule Lime Israel CEO Yaniv Goder says that "If we didn't travel around on scooters, there's no chance that we would make it to all our meetings."
Lime began Israel operations earlier this year and Bao, who is in Tel Aviv for the third time, says, "The traffic here is becoming more and more problematic."
Lime is one of four dockless e-scooter rental companies operating in Tel Aviv. The first on the scene last summer was US company Bird, followed by German company Wind at the end of 2018. After Lime began Tel Aviv operations at the start of 2019, Israeli company Leo joined the fray in the spring. Lime Israel began operations in Tel Aviv with 500 e-scooters and today has 2,000 e-scooters in Tel Aviv and Ramat Gan.
Globes: Isn't the market saturated? Aren't four players too many for Tel Aviv, which is not such a big city?
Bao said, "What is important is the rate of use of shared transport and in Tel Aviv it is the highest in the world. We came here when there was already a mentality of using electric transport. We are looking at cities that are mega-trendy and Tel Aviv is like that alongside Copenhagen and Amsterdam where 50% of traffic within the city is on bicycles or scooters."
He continued, "Today, we represent 1% of all world traffic and there are cities in which we have a 10% share of all traffic. In Tel Aviv, market penetration is amazing. 20% of the city's residents use Lime. That's a massive figure."
Lime, based on Chinese technology, was founded in 2017 by Bao and other partners. The company has raised over $800 million to date from investors like Alphabet (Google's parent company), and Uber, which recently invested more than $300 million. Lime began operations in North Carolina, then expanded to California, Seattle Washington, Florida and other states. Lime also operates in European cities with its electric scooters and electric bikes and is considering launching electric cars in 100 European and North American cities.
"There will always be the 1% who cause problems
However, together with its rapid expansion, opposition to its operations has also grown. In Manhattan, for example, riding an e-scooter has been banned as well as in other cities such as Madrid, while even San Francisco has restricted use.
In Tel Aviv too, protests have started that have recently included many demonstrations calling on electric scooters to be made illegal, or at least asking for the imposition of tougher regulations.
Bao is not too bothered. "Even when cars replaced horses on city streets not everyone was happy. I'm not worried but at the same time, I realize that there are things that must be done."
"In Tel Aviv we have an office and employ a team that carries out patrols throughout the city and we have sensors that indicate when a scooter is down or if it needs a mechanic to conduct maintenance."
Bao continues, "We are not like our rivals, who throw their scooters out onto the streets, and then that's it. All of us understand that parking the scooter is an important issue that requires education here for a better market. This will take time but on the other hand, with bicycles as well people do not always use the docking stations or the bicycle parking. You have to take into account the convenience of the users and understand that we have come to serve them. 99% of riders are good riders but there will always be the 1% who cause problems, and because them everybody else has to pay the price. Our challenge is to make sure that this one percent does not exploit the scooter for bad uses."
Are you concerned that regulation by the authorities will restrict your model?
"Some of the regulations that the authorities are talking about involves restricting the number of scooters. A lack of scooters can cause a shortfall in service and put up prices."
Just two years after it was founded, Lime has grown so rapidly that it has an estimated company value of $2.4 billion. Bao says that Lime is always thinking about an IPO but that is not their main aim at the moment but might be an option in the future.
Aren't you concerned that scooters are a passing fad?
"Not at all. Scooters are here to stay. It is not a passing fashion but part of the transport system. We will take cities to places that they need to be with less cars. If I look to the future, we will be there as part of the support plan for cities to reduce the number of cars driving into them. This long-term thinking also exists in Tel Aviv."
Published by Globes, Israel business news - en.globes.co.il - on July 22, 2019
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