Ford buys an electric scooter start-up that seeks to diversify beyond the automobile

The deal is valued between $ 80 million and $ 90 million, according to people close to the record.

In a year and a half, Ford said, he's aiming to expand the scooter operator to more than 100 US cities, as part of a wider initiative by the automaker based in Dearborn, Mich. extend its urban transport services.

Car manufacturers, concerned that models of buying and owning cars over a hundred years old may end up losing their favor in dense urban areas, are betting on the future of transportation, particularly because that apps for smartphones offer consumers easier ways to make short trips on demand.

Automakers have focused primarily on the development of autonomous vehicles and out-bounds, although more and more are turning to offers such as e-bikes and new software applications that are not automobiles.

Ford is the latest company to plunge into the scotland investment spree in Silicon Valley. Since scooter companies first appeared in San Francisco in March, venture capitalists – many of whom have regretted missing previous investments in transportation, such as Uber Technologies Inc. – have rushed into the marketplace. space, quickly making the assessments go up.

According to PitchBook, the PitchBook data provider, Bird Rides Inc. and its rival Lime have each achieved $ 1 billion worth of valuation faster than any other US startup. Together, they are collecting hundreds of millions of dollars more at much higher valuations, according to people familiar with fundraising discussions.

The bet is that electric scooters, which users rent for an average of $ 3 to $ 4 per trip, will quickly become popular and replace walking or driving for short trips.

The risks are considerable and many venture capitalists have described the companies as overvalued.

In September, Bird and Lime announced 10 million rounds each, representing about $ 30 million in revenue, a paltry $ 1.1 billion to $ 2 billion worth of Lime and Bird assessments.

The decline in cities was more important than what scooter companies and their investors expected, they said. Some big cities have limited the number of scooters allowed to hundreds or even thousands of people.

Ford's installation in the scooter industry comes as investors ask it to demonstrate that it can increase profits and reduce costs, while preparing for a future where automotive activity could be very different from that. that she is today.

The profitability of the automaker, once one of the strongest in the industry, has declined in recent quarters compared to the US competition.

General Motors
Co.

and

Fiat Chrysler Automobiles

NV. Ford plans to reduce cumulative costs by $ 25.5 billion by 2022 and has announced that it will reduce its payroll in the coming months, which should lead to layoffs.

Nevertheless, Ford executives say they must continue to invest in new transportation companies that can help it grow beyond its traditional car manufacturing and selling business.

Ford has been among the most active automakers in deploying these new services. Its offering now includes a shuttle service, called Chariot, operating in several US cities, and Go-Ride, a company that transports non-urgent patients to their appointments.

Marcy Klevorn, head of Ford's mobility services division, said the company needed a service that would help people travel distances of less than 3 miles through the busy streets of the city.

"Scooters really help people get around city centers and overcrowded campuses," Klevorn said in an interview.

Despite resistance from some cities, Klevorn said local officials were interested in electric scooters to reduce traffic congestion and provide a relatively affordable option for low-income residents.

Ford was attracted to Spin in part because it worked well with local authorities by asking for permission to start the service and sharing the data, she said.

"Ford believes that it is essential to associate with cities in this new world of mobility and not to impose constraints on them," she said.

Ford has introduced the Spin scooters this week in Detroit, where scooters of rivals Bird and Lime have appeared in recent months. Electric scooters were seen strewing the entrance to GM's headquarters in the heart of Motor City and elsewhere in the city center.

GM, whose leaders said they believe in "a fully electric future," announced last week the launch of an electric bike brand and the publication of photographs of a prototype.

Parent Mercedes-Benz

Daimler
AG

has created a separate mobility company that includes chairlift service and other smartphone-based applications to move people. The German automaker announced last month the creation of an electric scooter pilot in southern Europe.

Write to Mike Colias at [email protected] and Eliot Brown at [email protected]