Lime Scooter Contractors in Oakland Strike Over Pay Cut

[Contractor view of the Lime app: Uncharged scooters from the morning of Wednesday, February 12. On a normal morning, there would be only a small handful waiting to be charged across the entire city.]


For background, the company Lime dropped hundreds of electric motorized scooters onto the streets of Oakland in 2018, not acquiring permission from the city to place their fleet of dockless "e-scooters" here until this past summer.

Lime is now officially permitted by the Oakland Department of Transportation (OakDOT) to operate 1000 scooters in the city, as are a few other companies such as Bird and Lyft.

Being electric vehicles, these scooters require regular recharging. Rather than use employees to handle the tasks of retrieving scooters with low batteries, charging them, and returning them to the streets ready for customers, Lime chose to utilize independent contractors. The Lime app features a map where contractors can find scooters that need charging, just as the consumer end of the app shows customers where to find scooters to ride. Some contractors charge a few scooters per night as a side hustle. Others charge dozens as more of a full-time job. Lime calls these contractors "juicers," but it's the contractors getting juiced now.

Only the company knows exactly how many contractors it "employs," so it's impossible to determine exactly how many juicers might be on strike. At least the major ones who charge the most scooters have stopped. It's apparent because there are tons of uncharged scooters out there twenty-four hours a day now. Normally, by 7am, every scooter in the city would have a full, or least adequate, charge.

The company provides no method for contractors to communicate with each other, keeping them at arms length from the company itself and strangers to each other. Of course, this arrangement enhances the company's power over contractors, but that power is not absolute, as the current labor struggle demonstrates.

With no direct collaboration, juicers are collectively protesting the pay cut. A "work stoppage" may be the best way to describe the action or lack thereof. It's not a wildcat strike because there's no union. But there is a definite standoff happening under the radar of what the general public sees. Many if not most contractors aren't charging scooters and Lime is not relenting on the pay cut.

Originally, when Lime scooters first hit the streets, juicers were paid $10 per scooter to entice people into the business, and the rate would progressively increase up to $20 for uncharged scooters that remained on the street late at night or for those in hard to find places. But that rate didn't last long, and eventually the pay stabilized at $5 per scooter. It wasn't uncommon for the rate to increase to $7 or even above $9 for scooters high in the Oakland hills or for those that hadn't been charged in days.

The $5 base pay — along with increases throughout the night intended to motivate people to pick up every last scooter that needs charging — was enough that juicers would leave no scooter behind. The company releases low-battery scooters for pickup around 9pm every day and, oftentimes, every available scooter is picked up by 10pm.

However, Monday night, without notice or explanation, Lime dropped the base rate from $5 to $3.50, a 30% cut which makes juicing untenable, considering the time involved plus expenses such as gas, electricity, and so forth. The late night rate did increase to $4-plus-change after juicers began to resist the pay cut and far fewer scooters than normal were getting picked up.

On Tuesday night, the resistance clearly grew when the company dropped the rate yet again, this time to around $3.30, with odd variations for some such as $3.20 and $3.40. The late night rate only increased to $3.50. At that point, almost no scooters were getting picked up, as could clearly be seen on the map in the juicer view of the Lime app.

And so the standoff over contractor pay continues with untold numbers of uncharged scooters lingering in the streets of Oakland. A smattering of scooters have appeared for $3.70 and $3.80, and a select few popped up for $4.00 late Wednesday night, so perhaps the company is softening ever so slightly, realizing the bind it is in, that it depends on the labor of contractors to keep its customers happy with charged scooters.

Customers who have come to depend on the scooters as a part of their commutes can't be happy now. Anecdotally at least, there appear to be many more scooters knocked over on sidewalks in the last day or so. It could be that riders are frustrated when the Lime app directs them past numerous dead scooters to get to the limited ones with adequate battery power. Pushing over unavailable scooters seems like a mild reaction.

There's no official communication from the company about any of this, to riders or contractors. It's unknown what damage the company is doing to itself with the rate cut this week. How many riders will give up on scooters as a commuting option or defect to another company? How many juicers will never charge again if the previous standard rates are not restored?

As a business strategy, Lime may be switching at some point from their current contractor model to farming out charging to third-party companies. That's what one Lime employee said the company intended to do (yes, Lime does have actual employees, at their San Francisco headquarters and in their scooter servicing warehouse on Mandela Parkway in Oakland).

But why would Lime cut rates for contractors if a third-party plan was coming into play? And a third party is definitely not charging scooters now with so many uncharged remaining in the streets.

Lime doesn't have enough warehouse employees to pick up the slack. Earlier this year, Lime laid off about half of it's 20-person Oakland staff, according to one of their employees. Warehouse staffers handle maintenance and repairs, with a few picking up remnant low-battery scooters that contractors didn't claim, as well as fishing scooters out of Lake Merritt. Remaining employees were already stretched thin before the contractor strike began this week.

"We’re very confident that in 2020, Lime will be the first next-generation mobility company to be profitable," Lime president Joe Kraus bragged just last month.

Despite his rosy prediction, the e-scooter rental business may not be sustainable in the long run. Looks like the company is trying to keep going in no small part by balancing its books on the backs of workers, increasing the burden on employees and lopping off 30% of its contractor overhead in one fell swoop.

In addition, Lime recently doubled the per-minute rate customers pay to ride, from 15¢ to 32¢. Adding in the $1 unlock fee, the new rate means a relatively short one or two mile ride ends up costing about the same as taking a taxi. Such pricing has led to a noticeable decrease in ridership, especially in areas not near Oakland's wealthier new high-end apartment buildings.

In its supposed mission to become profitable, Lime is swinging in every direction and killing its own business.

It's unclear how California AB5 fits into this, if at all. One juicer who was charging 60 or more scooters per day was let go in mid-January, via email with no explanation offered, and he suspected it was because of AB5.

Another contractor who was doing 40-plus per night hasn't been seen collecting scooters in a month or so and it's altogether possible the same thing happened to him. Of course, contractors do come and go on their own — the odd hours and low pay take a toll — so it could be that he merely chose to move on.

Lime certainly can't operate without paying people to charge their electric scooters, be they contractors or employees. And it's hard to see how using a third-party company would save Lime any money on this key function of their business, providing scooters to the public with enough charge to actually get somewhere.

Perhaps Lime founders Toby Sun and Brad Bao will take responsibility for the current mess in Oakland and come clean about their real plans for the company.

Perhaps there is no realistic plan and executives are simply stretching out the perceived life of the company while they enrich themselves further with venture capital. Wouldn't be the first time a unicorn company was more of a cash cow for those at the top than an actual functioning business.