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The Sharing Economy Faces Worst Hit In The Pandemic

The global pandemic keeping well over a billion people inside their homes has become a stress test for one of the most fascinating corners of the tech industry: the so-called sharing economy.

Businesses whose services involve driving people around, renting them scooters or places to stay on vacation face obvious challenges during a society-wide shutdown. Some of the most highly-valued startups in history are experiencing a far greater challenge than anything they’ve faced before.

The sharing economy companies in the worst shape may be those who aren’t so asset-light. Scooter companies Lime and Bird Rides Inc. have electronic two-wheelers that are sitting around, depreciating in value. Lime, which is only operating in South Korea at the moment, is preparing to terminate workers. The Information reported it is also looking to raise a funding round 80% below its last private valuation.

A lobbying firm representing Lime and Bird had circulated a two-page presentation to members of Congress that called Covid-19 an “existential threat” to the scooter industry, according to a document viewed by Bloomberg. It asked Congress to delay scooter companies’ payroll taxes and to issue them emergency relief loans and loan guarantees.

Scooters got left out of the Senate’s bailout package, though the goal may be to get funding in a future transportation-related bill. After Bloomberg contacted Bird earlier this week about the lobbying effort, the company said it had changed its mind about pushing for aid.

Eventually, scooter companies will have to find money and get back on the sidewalks or they’ll be in trouble. As the memo puts it, “With drastically fewer people going into work, running errands, or attending social gatherings, micromobility trips are dramatically down, and the 3-year-old micro-mobility industry may not recover.”