Uber is leading a $170 million investment round in Lime, the electric scooter and bike rental company announced Thursday.
Under the deal, Uber will transfer its own electric bike and scooter division called Jump to Lime and the companies will further integrate their apps. Lime global head of operations and strategy Wayne Ting will become CEO of Lime while outgoing CEO Brad Bao will become chairman.
The deal came a day after Uber announced plans to lay off 3,700 employees, or 14% of its workforce, because of lost business due to the coronavirus pandemic. Uber's global gross bookings are down 80%, according to a report last month from The Information. CEO Dara Khosrowshahi will also forgo his base salary for the rest of the year, according to Wednesday's announcement.
Jump has about 500 people in its division, according to Uber, but some of those employees could be laid off after they transition to Lime. These layoffs would be in addition to Uber's previously announced cuts on Wednesday. Lime told CNBC it would try to take on some of the Jump employees once it takes over their operations.
Uber's stock rose 11.2% following the announcement and ahead of its Thursday afternoon earnings report. The stock rose after hours Wednesday on a stronger-than-expected earnings report from rival ride-hailing company Lyft. Lyft showed signs of stability despite the pandemic, though off a small base of rides.
The announcement did not disclose the valuation for Lime, though the company confirmed to CNBC it was lower than in its previous round. The Information reported on talks between Uber and Lime earlier this week and said the $170 million investment would value Lime at $510 million, 79% below its previous valuation. The report said the companies had discussed giving Uber the option to buy Lime between 2022 and 2024 at a specific price.