Shared micromobility operator Lime will temporarily shut down its operations in several South Korean cities at the end of the month. Lime attributes its withdrawal to regulatory shortfalls, like the lack of a request-for-proposal (RFP) process, which has led to a large number of operators with uncontrolled fleet sizes causing disorder and issues with rider compliance, especially around parking and congestion.
"[RFP processes] allow cities to take leadership (and ownership) of the chaotic scooter environment in order to improve parking, ensure safety and create a market that works for their citizens," a spokesperson at Lime told TechCrunch, adding that Paris is a perfect example of this working well. “We believe South Korea would benefit from moving to RFP systems that select a few outstanding operators in each city to deliver the best possible micromobility programs."
There are more than 20 e-scooter rental startups operating over 50,000 e-scooters in Seoul, South Korea's capital, including Swing, Beam, Xing Xing and Kickgoing. Lime's criticism of the lack of an RFP process in South Korea comes as many companies, like Tier and Neuron, favor limited vendor permits and even exclusive relationships with cities.
Lime also follows other shared scooter companies, like Wind Mobility and Neuron, that have pulled out of South Korea in recent months after a series of industry regulations were made. South Korea’s revised Road Traffic Act, which took effect on May 13 last year, requires e-scooter users to be 16 years of age or over, to have a valid driver’s license and to wear a helmet, which Lime said caused a drop in ridership.
The law also states that e-scooter riders must use bike paths and park in the designated parking lots. In Seoul, illegally parked e-scooters get towed and charged a towing fee of 40,000 KRW (approximately $30.89).
Lime did not share how much it paid in fines last year for illegally parked scooters, nor why its geofencing technology didn't serve to prohibit illegal parking, although the company did say that it did have geofencing tech in place in certain designated areas.
Lime's withdrawal comes two years and seven months after the company first launched its operations in October 2019. Lime operated roughly 22,000 vehicles in South Korea at one point, according to the spokesperson. The company didn't say when it would return to South Korea, the only Asian country Lime operates in, but the spokesperson told TechCrunch Lime intends to continue working with the government and other operators to establish a regulatory framework that will allow for the long-term success of micromobility in the country.
“We’re encouraged by policies put forward by the Main Government and the Mayor of Seoul Metropolitan City to invest in shared mobility infrastructure, and we look forward to being a long-term partner to Korean cities,” the spokesperson at Lime said. “As the Korean e-scooter market continues to develop, we hope to return with our newest hardware so riders can enjoy the best possible program.”
This article originally stated that Wind Mobility and Gcooter have pulled out of South Korea in the fourth paragraph. It has been updated for accuracy.