Uber Will Rent Electric Scooters from Lime Through Its App

Uber is teaming up with Lime to offer the company's electric scooters through its app. The ride-hailing company is also investing in Lime as part of a $335 million funding round. It's the latest indication that Uber is serious about diversifying beyond ride hailing.

Neither company offered much detail on the partnership, but a Lime blog postsaid the electric scooters will be available on the Uber app, and that Uber will slap its logo on them alongside Lime's. Uber previously applied for a license to operate a scooter-sharing service in San Francisco, where it also operates a small bike-sharing service through recently-acquired subsidiary Jump.

Lime was founded just 18 months ago, but has already raised $467 million, according to Bloomberg, and the latest funding round valued the company at $1.1 billion. Led by Alphabet's GV venture-capital arm, the new funding round will provide the cash to buy more electric scooters from Lime's Chinese suppliers.

Electric scooter-sharing services, along with the bike-sharing services Lime also operates, are dockless, meaning users can pick up and drop off their two-wheeled vehicle of choice anywhere. That's very convenient, but it's created a headache for cities that now have to deal with bikes and electric scooters strewn haphazardly on their streets. Uber has had its share of trouble with regulators over ride-hailing, and it may be buying its way into another business that poses similar issues.

Uber's partnership with Lime may also be the start of an electric scooter war. One of Lime's biggest competitors is Bird, which was founded by former Uber executive Travis VanderZanden. Bird has raised a comparable amount of money to Lime, according to Bloomberg, which noted that investors recently valued it at $2 billion.

When it comes to alternative forms of transportation, Uber is a step behind rival Lyft. Uber's main U.S. competitor just bought Motivate, the bike-sharing company that operates New York's CitiBike and Ford's GoBike in San Francisco. Lyft claims Motivate accounts for 80 percent of U.S. bike-sharing trips. The Lime partnership should at least keep Uber in the fight, though.