A blessing in disguise. No other idiom can better describe what the coronavirus outbreak has meant for Lime, the world’s leading operator of rented electric scooters and bikes.
When the pandemic first broke out, communities shut down, and so did riders. Lime lost 95 percent of its ridership. But as the weather got nicer, “much of that revenue has come back,” says Lime CEO Wayne Ting.
Lime recorded its first profitable quarter in the July-September period last year, as increasingly more people opted for e-scooters instead of subways and buses where social distancing is almost nonexistent.
“Non-face-to-face trends have seeped into our daily lives, and e-scooters can serve as an alternative to replace some portion of public transportation including buses where people are packed inside a closed-off space,” said Mark Kwon, general manager of South Korea at Lime, in an interview with The Korea Herald. Korea, the golden goose
Started in San Francisco, Lime operates across 120 cities, 30 countries and five continents. Of all those locations, South Korea may be one of the best for the e-scooter business, Kwon said.
There are a few reasons, other than the fact that Koreans live closely together in urban areas.
“We don’t have vandalism issues in Korea. In case of Europe and the United States, some users post photos of vandalizing e-scooters on Instagram. Some even take them apart or throw them under the bridge. But Korean riders are very gentle,” he said.
“Korean society is based on collectivism and members are mindful of public criticism. They have a high understanding of sharing (economy).”
And there’s also the climate factor, he continued.
“In countries where it rains too much or it’s too cold, parts decay pretty fast. Asian countries with moderate climate conditions are the best place to do business,” Kwon said. In Korea, Lime e-scooters have an average life span of two years.
Unlike its competitors, who simply purchase commercial e-scooters from outside, Lime independently designs and manufactures customized e-scooters using weather data for the local market. The data tells Lime which parts will decay first and allows the company to decide how strong they should make those parts. This allows Lime to cut costs significantly, the executive added.
After entering Korea in May 2019, Lime Korea has so far rolled out some 20,000 e-scooters on the road.
With the Lime app, users can simply scan codes and unlock e-scooters parked on the street. The riders can end the ride by parking the e-scooter anywhere they want. Unlock fees range from 300 won ($0.27) to 800 won, and fares are charged at 160 won to 230 won per minute.
According to a local market research firm Mobile Index, about 40,000 Android smartphone users used the Lime application in April last year. The figure has spiked to approximately 131,800 in March this year, presumably from the impact of the COVID-19.
Kwon said the company plans to add 10,000 more e-scooters within the year, as greater growth is expected in the post pandemic era.
As Lime scooters are dockless, the company has to find the vehicles from where riders have left them and redistribute them after recharging, which drives up operation costs significantly.
Last year, Lime Korea collected 3,000 e-scooters per day, sent them to five logistics hubs located nationwide for recharging and dropped them off again.
In a potential breakthrough to this problem, the firm has recently partnered up with GS Caltex to utilize the energy company’s 2,300 gas stations spread across the nation as charging stations.
“Land price in Seoul is expensive, so expanding infrastructure at our own cost is not feasible. We are mulling a business model in which we install e-scooter chargers at GS Caltex’s gas stations,” Kwon said.
It would be a win-win for both companies, he added, as GS Caltex could expand its reach to younger customers who do not own cars and have a positive image toward e-mobility. GS Caltex aims to utilize its network of gas stations as a car-sharing platform in the future. Regulatory uncertainties
But not everything is rosy for Lime Korea, as it faces uncertainties from the evolving environment for micromobility business – including oscillating regulations.
As is often the case with new types of businesses here and elsewhere, South Korea appears to be still in the process of figuring out what to do with the new breed of vehicles. With the growth of the user base, public complaints have also increased, with some considering them a public nuisance or hazard.
Last May, the National Assembly passed a revision intended at allowing those who are 13 years old or over to ride e-scooters without licenses from Dec. 10, 2020.
Then, just seven days before its effectuation, lawmakers on Dec. 3 tweaked the revision to raise the age bar to 16 and require all riders to get a license starting from May 13 this year. They also designated pedestrian roads off-limits to e-scooters, allowing them only on bicycle paths or the far-right edge of streets.
That change dealt a blow to Lime Korea’s business.
“People are getting confused by the change,” Kwon said.
He stressed that authorities need to roll out necessary infrastructure such as bicycle roads before forcing people to ride their e-scooters on the road alongside cars.
“E-scooters are now being hated by both cars and pedestrians. We need more bicycle roads,” he said.
It is not just the nationwide rules that change unpredictably. In August, the city government of Seongnam, Gyeonggi Province, issued an administrative order to e-scooter operators to pull their scooters from Pangyo -- a Korean equivalent to Silicon Valley located in the heart of Seongnam -- citing safety reasons. It was one of the areas where personal mobility sharing services were most popular.
As a result, all e-scooter operators including Lime, Beam, XingXing and Alpaca retreated from Pangyo that summer.
In Korea, e-scooter operators simply have to report their businesses and don’t need to obtain approval from local authorities. Embracing, leading green transition
The rise of e-scooters as a means for daily commuting is a positive development for society, as it helps reduce carbon emissions, Kwon stressed.
For 18 months from October 2019 to March 2021, Lime Korea recorded 5.82 million rides and a travel distance of 7.28 million kilometers. This is equivalent to saving 165,000 liters of gasoline and cutting 388 tons of carbon emissions, the company said.
As a last-mile mobility option, which public transportation services cannot quite cover, electric scooters have a unique place in the coming new mobility era.
Electric scooters are not designed to compete with or replace mass transit, Kwon said.
“They rather complement each other. When electric buses drop off passengers at some point, they can travel to their last-mile locations -- such as their homes and offices -- riding the e-scooters.”
Beyond the eco-friendly nature of the e-scooter sharing business, Lime Korea is committed to further contributing to global action on climate change, having recently joined Renewable Energy 100, a global initiative to source electricity 100 percent from renewables.
Under the RE100 initiative, the firm purchases electricity generated by renewables from state-run utility Korea Power Corp. and charges all e-scooters with green electricity.
Right now, trucks used to pick up and drop off scooters are conventional internal combustion engine models, but the company plans to discontinue their use by 2023, considering to replace them with battery-based trucks, Kwon said.
The US headquarters plans to expand RE100 to the entire scooter production process in China starting from 2030, Kwon added.
By Kim Byung-wook (email@example.com