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Why Uber's Partnership with Lime Matters

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Uber and San Francisco-based electric scooter startup Lime announced a new strategic partnership on Monday that will also include a “sizable investment,” although the exact amount has not been disclosed. The startup is currently in the midst of a $335 million Series C fundraising round led by Google Ventures (GV) that values the company at a cool $1.1 billion.

Times Are Changing

As part of the agreement, Uber will show Lime scooters as a transportation option within its application and put its logo on some of its scooters. Lime, which launched in 2017, now operates in more than 70 markets in the US and Europe.

The announcement is one of many in the burgeoning scooter sector, which includes rising stars Bird and Skip. At the end of June, Bird raised $300 million in Series C funding led by Sequoia Capital, pushing its valuation to $2 billion.

Uber also acquired Jump Bikes, a bike-sharing company that offers scooter rentals as well, in early April for an undisclosed amount. The investment is part of Uber’s goal of “making it easier to live without owning a car,” according to CEO Dara Khosrowshahi. 

Industry competitor Lyft announced an acquisition of bike-sharing company Motivate last week. Motivate operates Citi Bike in New York and Ford’s (F - Free Report) GoBike program in San Francisco. Although terms of the deal were not disclosed, TheInformation reported that it was worth $250 million in early June.

Companies are battling like never before to expand nontraditional transportation services. Chinese tech firm Meituan-Dianping made headlines when it acquired bike sharing company Mobike for $2.7 billion in April. The move is part of its strategy to vertically integrate complementary businesses into its overall structure. It also broadens the competition with domestic competitor Ofo, which is backed by Alibaba (BABA - Free Report) . Another key point is the fact that both firms are in the midst of expanding their services overseas, and will soon arrive in the US.

How’s Uber Doing?

One thing is for sure, there is a lot of money to be made here. But with the growing number of companies raising ludicrous numbers in capital, it is difficult to project who will come out on top.

Uber has been no stranger to controversy in recent years, with scandals seemingly lining up one after another under former CEO and company founder Travis Kalanick. However, much has changed since Khosrowshahi replaced Kalanick nearly a year ago. Since then, Uber has settled most of their open cases in court, resumed operations in disputed areas, and is now focused on an acquisition-heavy approach to fight Lyft.

While information about the ever-elusive IPO remains scarce, Uber is still an interesting company to monitor. Should its acquisitions and strategy succeed, it could very well become the all-around transportation hub that it seeks to be. The future is coming investors, and faster than we may realize.

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