Executive Summary

In a further analysis of the shared mobility industry, Lime was selected as the target company. The following is a description of the operational status of Lime in various aspects, combined with VRIO model, SWOT model, etc. to analyze Lime’s competitive advantage (core competence) and company value, and propose strategy recommendations for Lime’s future.

Introduction

Lime (formerly known as “Limebike”), a US free shared bicycle company, currently offers shared bicycles, electric scooters and electric-assisted bicycle (e-bike) rental services in over 70 cities across the United States.

LIME’s mission is to provide transportation solutions on demand to help people move seamlessly throughout the community and solve the last-mile headaches (Lime Co. Ltd, 2018), their total number of shared bicycles and shared electric scooters in Europe and the United States has already reached 6 million. Lime has more than 100 employees at its San Mateo headquarters in California, many of whom are from Facebook, Uber, Amazon, LinkedIn and Pepsi (Todd, 2018).

Lime was founded in January 2017 by Toby Sun and Brad Bao and received the first round of financing. The startup, called LimeBike, was first launched in June 2017 at the University of North Carolina at Greensboro, where 125 bicycles were deployed.

In the following month, it launched 500 bicycles in Seattle, Washington, and then raised $225 million (£170 million) in October. By May 2018, the company was renamed Lime and announced that it would work with scooter manufacturer Segway to produce a new two-wheeler.

The latest $335 million (£252 million) round of funds led the company to value $1.1 billion (£830 million) and established its status as a unicorn (Todd, 2018). Recently, Uber will become Lime’s strategic partner in the field of electric scooters and they are preparing to launch a co-brand of scooters and support them for use in Uber apps.

Internal Analysis

-Strategic Profile

Lime was formally established in January 2017. Throughout 2017, Lime provided their customers with “a fleet of 3G, GPS-enabled dock-less smart bikes”. According to the company’s CEO, the reason why the company is named LimeBike is just to be more focused, but their vision is not just bicycles. Therefore, in 2018, Lime decided to move from the shared bicycle field to the electric and scooter tracks and to develop a variety of electric vehicles and electric scooters to meet the diverse travel needs of users.

In November, 2018, Lime launched their car sharing services aiming at the market of travelling more than 5 kilometers. From this view of point, Lime is presently trying to diversify their products and to achieve further diversification and differentiation.

There are several characteristics in sharing models Lime is currently adopting. Car sharing model may be the earliest sharing scheme aiming to provide private car services for those who do not own one.

Scooter sharing is the latest innovative emerging vehicle sharing model (Shaheen, 2015) with an advantage of quick transportation. As for the bike sharing system, it allows users to access the bicycle site network whenever they need to go to an unattended station to select mobile options on demand which usually in urban areas.

Among the three shared products offered by Lime, the shared scooter has a high turnover rate and it is often booked before they are finished using by the last customer because they are faster and smaller-size.

After analyzing users’ data, in areas with high population density, the use of scooters is higher; when traveling longer distances, people tend to choose electric vehicles; those who like sports in cities are more willing to use shared bicycles. According to the information, services Lime is providing can mostly cover customer daily need for transportation and is more lower-carbon than other public or private transportation methods.

-Resources and Capabilities (VRIO analysis)

Through analyzing the industry of shared mobility, we find this industry is in fierce competition and requires certain technology development. With a mostly identical business pattern, Lime’s design of their bikes, self-serviced rent/return system and bike management system is very easy to be imitated, thus becomes its realized competitive parity.

However, dock-less data will become more valuable as the technology of unmanned bicycles improves. For example, the “gyroscope” technology that Limebike began to mandate that all bicycles should install can measure the smoothness or bumpiness of the road and help find potholes on the roads, in order to provide valuable reference information for the urban transportation department (Bordenkircher et al., 2018).

According to statistics, on a global scale, sharing mobility industry has set off a new wave of business, with more than 1,000 companies involved in this field. In December 2017, as start-ups reached a milestone in the United States, Lime also began to enter the European market. Lime’s electric scooter was first launched in Berlin, Zurich and Frankfurt at the end of 2017 and then launched in Paris in June – the city that was launched in 2007 as the world’s first bicycle sharing network (Felix, 2018).

After entering more than 100 cities around the world such as Canada, Mexico, Spain, France, Germany, Switzerland and other places, Lime added a new Australian business, marking the company’s further involvement in the southern hemisphere. As the first scooter project in New Zealand, Lime pushed its electric scooter to the cities of Auckland and Christchurch in New Zealand in October,2018, launching the city scooters in Auckland and Christchurch at the number of 1,000 and 700 respectively (Connellan, 2018). Although Lime has started its journey of business globalization, due to its strategic stability, the current development is only a small-scale pilot. Through the pilot situation, Lime can better carry out different strategic planning for different markets and give full play to this competitive advantage.

Lime offers bicycle and scooter rental services in more than 100 cities around the world, but plans to test its car service LimePod on the streets of Seattle in November 2018, for the first time in the car sharing field.

Prior to this, bicycle and scooter service targets last-mile headaches, and in order to diversify their business and enhance the user experience, the new LimePod shared car can solve the travelling problem of 3-5 miles or even further. A free-floating car rental program can make a slight decline in the number of individual car ownership.

Increasing car sharing services will allow people to get rid of their private cars (Gutman, 2018), thereby achieving energy-saving emission reduction and slowing traffic. Lime is the world’s first and the only company who provide their customers with driverless shared bikes, shared electric cars and shared scooters. Therefore, diversified vehicle choices are one of Lime’s very important long-term competitive advantages, which can bring huge development opportunities and benefits to Lime.

Lime has entered more than 100 cities around the world, with more than 10 million users on the platform. Among the 12 European countries Lime has currently entered, it ranks the top 5 in the mobile app list in more than half of those countries.

Previously, the core issue for sharing models is to maintain sufficient numbers of vehicles at each station (Laporte et al., 2015). However, with a dock-less rent and return system, Lime can solve this problem and enhance customer satisfaction. As long as Lime can improve the user experience and achieve a high level of customer retention, it can make this huge user base a unique long-term competitive advantage.

Strategic Issues (SWOT in appendix)

Lime’s strengths lie on its mature business model, creative innovation on vehicles’ choices, relatively low cost compared to other transportation tools and environmentally-friendly lifestyle. However, repairing vehicles and maintaining customers’ satisfaction take high contribution. As a new business, it relies heavily on technology development and cheaper sources of vehicles.

Lime should consider recycling and replacing vehicles in a more effective and efficient way to lower down fixed cost. Lime’s bicycle supplier is Tianjin Fujitsu in the supply chain. Fujitec is one of the world’s largest bicycle manufacturers and this is one of the advantages Lime has built, for Lime can effectively reduce production costs compared to other overseas companies.

Expanding to new market can be considered as the biggest opportunity for Lime to enlarge its market share. However, increasingly stricter regulation and different traffic and road condition should be taken into account when Lime entering a new market.

Evaluation of Alternatives

Lime can choose to continue to enrich its vehicle options to provide more favorable options for customers with different needs (for example, a short-term daily rental service). At the same time, it can consider to form a strategic alliance with other transportation companies to achieve synergy effect, so that customers can choose a more diverse travel method, travel a wider scale and achieve more cost savings.

Lime itself can also save the cost of producing vehicles and co-operate the management system within the alliance, lowering down the maintenance and management fees. If the strategic alliance is formed with a foreign company, a multinational union can help Lime to be a global famous brand, significantly enhance its market share.

Recommended strategy

Speaking of shared mobility, safety is the biggest concerned issue for user. In Vancouver, there is strict supervision of the helmet, requiring each bicycle to be equipped with a basket for storing helmets and pads for sanitary purposes.

The helmet will be free for bicycle sharing users, and maintenance personnel will be available for helmets every day (DailyHive, 2016). But most dock-less companies don’t choose to put a helmet on their bike. For example, LimeBike chooses to send more than a thousand free helmets instead of leaving a helmet on the bike (Cohen, 2017).

In order to prevent abuse of customers’ personal information, Lime should establish a formal and strict information collecting and management system. Balancing data sharing (open data) and privacy between individuals, companies and public institutions is critical to the government (Shaheen et al., 2016).

For those additional photos, reviews and social media platforms (Skov, 2017) Lime has collected from customers, it can run data analysis and find out customers’ consuming pattern and customize their services.

Overseas users attach great importance to product quality and user experience. In order to maintain a partnership with the local government, professionals should be hired responsible for government relations. After completing the product design and operation, integrating the attitudes of various cities and regional governments, conducting small-scale trials on different businesses, adopting a step-by-step approach, first seeing the effects, and then expanding the scale is a better choice of strategy.

Reference

Bordenkircher, B., & O’Neil, R. L. (2018). Dockless bikes: Regulation breakdown.

Cohen, S. (2017, August 31). Who is responsible for helmets when it comes to bike shares? Retrieved March 17, 2018, from https://www.sfgate.com/local/article/seattle-bike-share-helmets-limebike-spin-12162539.php

Connellan, S. (2018). Lime rolls out e-scooters and e-bikes in Australia. Retrieved from: https://mashable.com/article/lime-e-scooters-australia/#nDdDtrZbfiqw

DailyHive Vancouver Staff. (2016, February 25). Will the mandatory helmet law kill Vancouver bike share? Retrieved April 03, 2018, from http://dailyhive.com/vancouver/vancouver-bike-share-helmet-law/

Gutman, D. (2018). Bike-share company Lime launching car-rental service in Seattle. Retrieved from: https://www.seattletimes.com/seattle-news/transportation/bike-share-company-lime-launching-car-rental-service-in-seattle/Shaheen, S., Cohen, A., & Zohdy, I. (2016). Shared mobility: current practices and guiding principles (No. FHWA-HOP-16-022).

Henry, Y. C. Y., & Paul, L. C. H. (2018). INNOVATION AND USER BEHAVIOR FOR ENHANCEMENT IN BIKE SHARING PROGRAMME. MATTER: \International Journal of Science and Technology, 4(1).

Laporte, G., Meunier, F., & Calvo, R. W. (2015). Shared mobility systems. 4or, 13(4), 341-360.

Lime Co. Ltd. (2018). Shared Mobility Pilot Program Application. Retrieved from website: https://www.smgov.net/uploadedFiles/Departments/PCD/Transportation/LIME%20-%20Scooter%20and%20Bike.pdf

Lime Co. Ltd. (2018). Annual Report 2017. Retrieved from website: https://www.limebike.com/hubfs/EOY%20Data%20Report.pdf

Lime Co. Ltd. (2018). Lime Official One Year Report. Retrieved from website: https://www.limebike.com/hubfs/Lime_Official_One_Year_Report.pdf

Shaheen, S., Chan, N., Bansal, A., & Cohen, A. (2015). Shared mobility: A sustainability & technologies workshop: definitions, industry developments, and early understanding.

Skov, J. (2017). New Urban Mobility Ecosystem.

Todd, F. (2018). What is the Lime app? The urban electric scooter provider backed by Uber and Google’s Alphabet. Retrieved from: https://www.compelo.com/what-is-lime-urban-electric-scooter-uber/

Appendix

Table 1 VRIO analysis of Lime business

Table 2 SWOT analysis of Lime business

Table 3 Dynamic SWOT analysis of Lime business