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Lime launches Free Floating CarSharing service

San Francisco-based startup Lime has spent the last year scattering an assortment of brightly colored scooters and bikes around American cities, arguing such services will reduce car use and traffic problems. But even Lime can’t quite sever ties with the automobile. Starting this week, the company will start spreading around Lime-branded cars, too.

Lime is launching a car-sharing service in Seattle this week, starting with the placement of 50 vehicles on city streets. The company plans to add more cars weekly until it gets to 500 by the end of the year. By early 2019, Lime says it aims to have 1,500 cars in Seattle, which would make it the single largest free-floating car-sharing program in a U.S. city.

Lime’s new service, which it calls LimePod, will operate similarly to its bike and scooter offerings. Users will be able to use its app to find cars, then unlock them for $1 and pay 40 cents per mile to drive around the city. The price will include insurance, although Lime didn’t provide details of the coverage. This model, which mirrors that of Car2Go and ReachNow, is often called “free-floating” car sharing, to distinguish it from services like Zipcar where each vehicle has a designated location.

“It’s another important component to get around,” said Toby Sun, Lime’s chief executive officer. “The primary use case we want to serve is longer distance, higher terrain and bad weather.” In addition to Seattle, Sun said Lime is talking to an as-yet-unnamed California city as a second LimePod market.

Lime differs from its major scooter rival, Bird Rides, in its zeal to offer a wide range of transportation options. Bird has consistently said its focus is solely on scooters. Lime, however, started with bicycles, then quickly added e-bikes and scooters, and for months has been planning to add car-sharing in some form. This May, Lime executives told Bloomberg News that the company was designing vehicles it called “transit pods,” which would resemble enclosed golf carts or electrified rickshaws and have top speed of about 40 miles per hour. Lime’s near-term plans now center on commercially available automobiles. It’s purchasing several hundred gas-powered, two-door Fiat 500 cars, and painting them white and green with its logo of a lime on the doors.

Lime argues its new automobile business fits firmly into its mission to reduce car use. While adding cars to city streets in order to reduce congestion is counterintuitive, there’s evidence that car-sharing does cut down on the number of cars on the road. A 2016 study of Car2G0 found that it led to a 6 to 16 percent drop in the number of miles the average household traveled by car. In Seattle, each new Car2G0 vehicle added corresponded with a reduction of three to 10 private vehicles, either because people sold their cars or decided against buying them.

Seattle was Lime’s first major market for bike share, and the company currently has permits for 7,500 pedal and electric-assist bikes in the city. (Seattle doesn’t allow scooter-sharing services, citing safety concerns.) In Seattle, free-floating car-sharing services can get permits that allow users to park at metered and residential parking spots without paying. Lime has applied for 500 permits, and says the city is processing them on a rolling basis. Sun cited Seattle’s reputation for a progressive stance on alternative transportation and Lime’s existing user base as the primary reasons to focus on the city.

But whether Seattle can support a doubling of its fleet of shareable vehicles is an open question. Seattle already has the most developed free-floating car share industry in the country. Car2Go, owned by Daimler AG, and ReachNow, owned by BMW AG, each operate fleets of about 700 vehicles in the city. Car2Go, by far the larger company, has 128,000 members in Seattle alone, and says the city is its largest market in the U.S.

In March, BMW and Daimler said their car-sharing businesses would merge as part of a larger partnership on mobility services that also includes cooperation on business plans for ride-hailing, charging for electric vehicles and transportation planning apps. The merger has yet to be approved by U.S. regulators. But it’s possible that Lime’s service may show up just as competition in the market evaporates.

There are also signs that Lime is already stretched pretty thin. It has issued two separate partial recalls of its scooter fleet in the last two weeks. On Nov. 6, Lime said it was bringing Joe Kraus, a board member, on as its chief operating officer, in part to lighten the load on Sun. Kraus immediately acknowledged that Lime was facing a global shortage of scooters, and said much of his initial attention would be spent addressing its operations in Asia. Lime continues to face pushback from local governments as it launches scooter or bike operations in about five cities every week. Still, Sun dismissed critiques that Lime was losing focus. “We shouldn’t easily settle or be satisfied with one product,” he said. “We’re focusing on something bigger.”

In July, Lime hired Peter Dempster, who had overseen ReachNow’s launch in Seattle, to run its car-sharing business. Dempster said Lime hopes to shift its car-sharing fleets to electric vehicles, but said the logistics of charging the vehicles made electric cars unsustainable for now. Like bike- and scooter-sharing services, free-floating car-sharing services require operators to monitor the fleets and rebalance them, so that vehicles remain available in the areas where people are looking for them. For scooters, Lime has used both paid staff members, and “juicers,” people it pays a per-unit rate to charge and redeploy the vehicles.

Lime isn’t sure whether it will use juicers for cars in Seattle. “We are looking at translating a lot of our operational abilities to car share,” said Dempster. “You can’t pick up 20 cars and put them in the back of a van.”

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