2-wheeler dealing: Uber sells Jump to Lime - what it means for Auckland

On November 29, Auckland Council gave Lime 48 hours to disable its scooters (pictured in its Kingsland warehouse) and a week to get them off the city's streets. Photo / Jason Oxenham

Lime is set to once again have a presence in the Auckland e-scooter market - thanks to wheeler-dealing in the US.

Uber has sold its Jump e-scooter and e-bike business to Lime - but the complex deal could see Uber buying Lime outright in 2022.

"We are thrilled to join forces with Jump to offer expanded mobility options and services to cities around the world. In New Zealand, the deal is expected to close in a month," Lime NZ public affairs manager Lauren Mentjox told the Herald this morning.

Lime won't comment further until the deal is finalised.

A spokeswoman for Uber said, "The transition will happen in waves, starting in the US and Canada followed by Australia and New Zealand, which we expect will be completed in approximately 30 days".

On Friday NZT, the Nasdaq-listed Uber reported a US$2.94 billion quarterly loss amid global lockdowns, and plans to layoff 3700 or 14 per cent of its full-time staff.

The result had two interesting footnotes: Uber Eats enjoyed a 52 per cent increase in bookings during the quarter, and Uber's plan to offload Jump (losing around US$60m a quarter) to Lime.

Uber bought e-scooter and e-bike sharing outfit Jump in 2018, looking to participate in the micro-mobility craze that was nibbling at the edges of its car-based rideshare business.

Around the same time, Uber - along with Google's venture wing - covered its bets by investing hundreds of millions in Lime.

A complex deal announced on May 4 saw Uber lead a new US$170m funding round for Lime (the raise valued Lime at US$510m or 79 per cent less than its pre-outbreak worth).

As part of that deal, Lime agreed to buy Jump for an undisclosed sum. And - according to the Wall Street Journal, citing a person familiar with the terms - Uber will get the option to buy Lime outright in two years' time.

Lime will also be integrated into Uber's app as part of the deal, the Journal says.

Although convoluted, the deal would ultimately simplify life for Uber, which would be left owning a single e-scooter and e-scooter operation.

In October 2018, the US-based Lime became the first e-scooter sharing company to launch in NZ, under a trial licence.

It was later joined by Australian-owned Wave and the homegrown Flamingo.

But Lime and Wave both missed the cut on November 29, 2019 as Auckland Council announced the four e-scooter operators for its first official licence period, which runs through to June this year.

The council went with newcomers Jump by Uber (which had already beaten Lime to the punch in Wellington), Singapore-owned Beam and Neuron, with Flamingo the only survivor from the trial period.

All four were judged to have a better "safety profile".

Even before the Uber/Lime financial machinations, Lime was plotting a comeback.

"We will be applying for a permit to operate in Auckland in the next licensing period [from June 1] and would be privileged to be able to serve the Auckland community once again," Lime's Mentjox told the Herald on March 4.

The council went with a short initial licence period because the government's "Accessible Streets" policy, which will govern where bikes and scooters can ride, and how, is still under discussion.

Rideshare e-scooters were removed from streets as part of the level 4 lockdown, although Flamingo has returned for level 3 refashioned as an Uber Eats-style food delivery business with dedicated contract drivers - or at least riders.

Auckland Council six-month licence period to June 3, 2020
• Total e-scooter allocation: Raised from 1875 to 3200
• Beam: 880
• Neuron: 880
• Jump by Uber: 735
• Flamingo: 630
• Yet-to-be-allocated: 75