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Uber officially enters the scooter wars

Photo by Christophe Archambault//AFP/Getty Images

Uber says its users will eventually be able to order an electric scooter, via a strategic partnership with Lime.

Why it matters: Uber wants to be a full-stack provider of local transportation, not just ride-hail, and this puts new pressure on rival Lyft.

Uber also is investing in Lime, as part of a $335 million financing round led by GV, the venture capital affiliate of Google parent Alphabet.

  • The parent company is also investing, so this makes for some interesting bedfellows. Uber was sued by Alphabet over alleged theft of self-driving technology, even though Uber also has money from GV. A different Alphabet investment arm, called CapitalG, subsequently invested in Lyft.
  • Other investors in the round, which was first reported by Axios, include IVP, Fidelity, Atomico and return backers Andreessen Horowitz, Coatue Management, Fifth Wall and GIC.

The question now is if this could be a prelude to Uber making an acquisition offer for Lime, which is being valued at around $1 billion.

Certainly it's possible, given that Uber earlier this year partnered with an e-bike company before buying it outright. But it's more likely that this is about blocking Lyft, which wants to get into scooters — both it and Uber applied for San Francisco licenses — but which also is unlikely to partner with the other big scooter player, Bird, because it's founder and CEO is a former Lyft employee who left on bad terms.

It's also worth noting that neither Uber nor Lime said when scooters will actually begin appearing on the Uber app.

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