Recent investments by Uber and its European rival Bolt in e-scooters show that the companies see a future for micro-mobility once the coronavirus pandemic subsides.
Uber invested again in Lime, one of e-scooter sharing’s biggest companies, as part of a $170 million round at the beginning of May while Bolt has plans to deploy e-scooters in 45 cities over the summer.
The Lime investment came just days after Uber announced it was shedding 3,700 jobs globally as part of COVID-19 cost cutting.
The gig economy has been battered during the pandemic. In March, as lockdown measures took hold, Uber and its main US rival Lyft saw a drastic decline in people booking drivers. Uber’s quarterly earnings for the first three months of 2020 laid out the extent of this decline in rides, which is a core part of its business.
On the flip side, food delivery is having a moment as people remain at home. This was the one minor silver lining in Uber’s earnings report as its food delivery division, Uber Eats, recorded increased demand in several markets.
As the company takes measures to get people back in cars for rides, such as drivers wearing masks, it could be some time before that business rebounds.
Uber appears to be bolstering its other business verticals to make up the shortfall and its investment in Lime suggests it is betting on a recovery for micro-mobility – e-scooter businesses in many markets have seen their own fair share of drops in users.
Bolt, which is backed by Daimler and competes with Uber for rides throughout much of Europe, is following a similar path to its rival. In the first week of May, it announced plans to roll out e-scooters in 45 more cities in Europe and Africa throughout summer.
The Estonian company bears many similarities to Uber as a wide-reaching on-demand logistics and transport company. As well as ride-hailing and e-scooters, it does food delivery.
Similarly, it has been struck by the pandemic. It hasn’t laid off any staff despite seeing a 75% drop in revenue in March, however the company has reportedly sought assistance from the Estonian government.
As lockdown measures gradually ease, cities in Europe are exploring ways to make their streets less congested with cars and more friendly to cyclists and alternative transport options.
Milan, for example, is turning 35km, or about 21 miles, of streets in the city over to pedestrians and cyclists.
The UK will kickstart trials for e-scooters in the country as part of a package of measures that includes greater investment in cycle lanes. This is a significant move by the UK that could open up a whole new market to e-scooter companies in the future. It had been one of the last major markets in Europe to not regulate e-scooters on its streets. Ireland remains one of the last hold-outs on e-scooters.
Pre-pandemic, companies like Lime and rival Bird regularly touted e-scooters as viable alternatives to cars that are greener and would reduce traffic. The coming months could be a pivotal time for e-scooter companies to seize on that message again as people venture out of their homes.