Lime IPO: CEO Wayne Ting on becoming micro-mobility's last man standing through unit economics discipline

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Let me tell you about Cisco critical infrastructure for the AI era. Unlock seamless real-time experiences and new value with Cisco. Our next guest is Wayne Tang from Lime coming in on IPO day. Wayne, how are you doing? Congratulations.

Welcome to the show.

Thank you so much. Thanks for having me. uh talk to us about the journey to get here today. What does it feel like? What's going through your head right now?

It's been a it's been a long journey and I I feel great to see Lime go public today and I think

yeah,

it's it's certainly not been a linear journey. I mean, as you guys know, there's been a lot of companies in microobility

and Lime is the last man standing in a very tough industry. And I think we're the only ones that have built a scalable, sustainable, profitable business. And I think that's why we've earned the right to be a public company today. And I feel like um to see Lime trade publicly was a validation of the hard choices we made along the way, but also a lot of sacrifices to get Lime to this point.

Yeah. What uh what changed culturally recently or what is the culture like? because it feels like the key to this business is operational efficiency, uh, excellence, not having a ton of side quests. You have to be focused. This is not a business with some, you know, just crazy you struck lightning 25 times in a row and and you can just make a ton of mistakes. Like operational efficiency is key to the business. Correct.

You're absolutely right. It's a I describe it as it's a game of inches. I mean, our average vehicle is generating $7.50 of revenue a day.

We have to charge the vehicle, fix the vehicle, m use spare parts,

make sure it's positioned the right place at the right time. And we do all that and we generate a 50% plus cash margins on that $7.50. And because we're able to get that level of margins, we pay back our vehicles in less than one year. When you're talking about a relatively low price point product, small mistakes very quickly adds up and the and the business becomes upside down, which is what you see most of our competitors. Yeah,

they and it's not for the lack of capital. A lot of our competitors raised more money than we did. They were in the market longer.

And it's obviously hard because if it was easy, they would have done it too. And I think it also requires a clear a clear view of like what actually matters. And in the world of limited resources, we are very focused that we want to be the way to crack this business is great hardware, great software, great operations, government relations

and then everything else we have to dep prioritize in a incredibly strict way in order to put our limited resources towards the things that actually matter in this business.

What is going on on the supply chain side? Is there a is there a constraint on uh battery capacity because of demand from AI broadly? It feels like the AI industry is sucking up every possible piece of the supply chain from you know coatings that go into toilets to everything that generates power under the sun. Rocket motors and and uh jet engines are being bolted to the ground to generate power. Is that a is that a constraint or is there an opportunity that demand for energy will ultimately uh reduce the price of batteries or maybe even extend their life?

Yeah. So I haven't seen a shortage on battery cells to date, but I think one of the advantages that Lime has is we are vertically integrated um in hardware and software. So we have every ebike e scooter you see online we have designed engineer inhouse. We control our own supply chain. We outsource the manufacturing. But because Lime is the world's largest purchaser of ebikes, e- scooters, it also means we get um we get warning when there are shortages of critical parts and suppliers want to sell to lime. So I have seen this year a shortage and a inflation in um memory chips. I mean clearly AI has driven up demand on the high-end memory chips. We don't put the AI chips into a line bike or scooter, but I think a lot of the supply chain has reoriented towards manufacturing the high-end. So even if you're using a

middle of the road or low-end memory chip, we're seeing significant price inflation. But more importantly, if you don't lock in supply, you're not even there's not going to be any supply to be bought in 2027 2028. But because Lime is the global leader in microobility, our suppliers are coming to us early and saying how might we work with you to secure supply for next year and let's lock in prices now before the kind of um price inflation that we see. And I think that's one of the advantages of being vertically integrated. But even this is a it's a real game of interest. We have to we have to look ahead on not just what's going to happen this year, but what's going to happen in the future. The other supply chain um challenge we we navigated this past year was liberation day. So the president announced a series of tariffs and some of these tariffs were 150% on some countries. But because lime controls our own supply chain prior to 2026 we started to diversify where we are doing our manufacturing. In fact, we stood up full manufacturing capacity in three different countries. And what that allows us to do is depending on the policies of the day, we could work with different vendors to ensure that not only do we have the right supply, but that we are optimizing for the um any sort of tariff um headwinds that we see. If you're buying offtheshelf hardware from the same Chinese manufacturer, these are not tools in the box for you. And I feel like a lot of our competitors really

couldn't navigate whether it's the tariffs or any sort of component shortages in the same way that lime can. This is also where scale matters. We are in a winner take most market similar to Uber and Raicher and Door Dash and food delivery and winner takemost market. It's great to be the winner and that's lime. It sucks to be second and third place because you don't have the same reliability, the same scale to invest in software hardware capital expenditure and you don't have the scale to actually build proprietary hardware. It doesn't make sense to build your own scooter and ebike if you only have a fleet of a thousand vehicles because you have to advertise that RD cost over a much smaller fleet. We're able to have a independent product strategy because Lime operates over 300,000 bikes and scooters in 230 cities, 29 countries around the world. That scale Vantage only accelerates now that Lime is public because we have more capital to invest in the business. I think we realize it's important to be vertically integrated. We realized the importance of scale and we built a business to capture those competitive advantages early which is why Lime is here and most of our competitors are bankrupt or not doing very well.

Yeah.

Uh if you could rewind to the early days during the height of the competitive dynamics between you know you and Bird and and other players, how how would you have knowing everything that you know now? What what would you have done differently? I I think there's lots of small things I would do differently, but I think the overarching strategy it was the right one and I think it's proven out by um Lime's um going public today. I think it starts with I remember early days of lime and people still have this debate in Silicon Valley and it really is a false choice which is is growth more important or profitability more important and that's not really you need to get your unit economics right to earn the right to grow rapidly

and the incentives in the early days were so that it really incentivized the wrong behavior because nobody was making money. the only way to survive is to open up incremental venture capital. And when venture capital firms are saying that what we're going to value you on and what we're going to give you money on is growth, it incentivize companies to chase after unprofitable revenue and frankly unsustainable growth even if it doesn't make financial sense.

Yeah. And that would be even like markets markets that turned out to not be a great fit for this type of mobility solution. Is that is that like an example? Because I imagine like there was just pl like like LA is an interesting city because it's like so dominated by

by cars and it feels, you know, anyways and I just remember when I I moved to LA during the the the early days of this like of the war that you guys had during the heyday of like Bird Graveyard and and all those accounts that probably made everyone's life a lot harder. But it felt like if you're just chasing growth, you're going to go into markets that you know are not even that great because if you don't get that revenue growth, your competitor is going to and they're going to be able to raise more capital, etc.

Capital fight.

Exactly. And in fact, one of the first things I did when I became CEO is shrink our footprint.

Because I mean, if you're if you are running a coffee shop and you were losing money at every cups of every single cup of coffee, you should probably sell fewer cups of coffee and figure out how to make money before you started opening up new coffee shops. And that was the reality of lime eight years ago. I think I want to say our gross margins were negative 300%. Every dollar of revenue, we lost 300 bucks. It was like before we think about growth, let's fix that. We should be making money at the trip level, at the scooter level. So we shrunk our footprint, focus on the things that matter, fix our unit economics and but and then really accelerated growth once we got that right. And I think the companies that really had a growth at all cost mentality even when it doesn't make financial sense actually raise more money for a period of time but the law of economics catches up to everybody. You can be economically irrational for a period of time but you can't be economically irrational forever. Even the dumbest VC at some point figures out the game. And I think when the when the irrational funding left the industry, that's actually when I think Lime's competitive strengths really became more obvious because we were not competing on our ability to raise more capital and to burn it faster. We started to compete on the quality of our hardware, the quality of our operations. And I actually think

getting past the hype cycle was a major reason why Lime is here. If we're still in the middle of the hype cycle, then we'll be on that treadmill of crazy growth. Burn all this money to raise more money to burn more of that in order to raise more money. And I think that's a losers game.

Yeah.

Congratulations to the whole team. I'm sure when when you took the job as CEO, maybe eight out of your 10 friend closest friends were like, "You're absolutely crazy for taking that job." But uh you did it.

You got it here.

Very cool.

Congratulations.

I actually was texting with her the night I got took this job. I was having drinks on the rooftop of a friend's um house and I was there with six friends from Uber.

Every single person is like, "This is such a dumb decision. It's a no-win job. You will never be able to turn this around. You should have never done this. You locked yourself into a trap that you can't get out of." And I just recall, I mean, the fact that you mentioned that, I recall this conversation. I was texting with that group of people being like, "Remember what you said to me?"

Contrarian. Contrarian. And right

the victory lab. You deserve a drink on top of a roof deck. Hopefully, you got one. I'm sure it's been a long day.

No, I I literally knew. I knew. I was like, these guys, I'm sure around a lot of smart people. It was very contrarian to to to go and do this. And uh congratulations on, you know, an incredible moment.

Thank you so much.

Thanks so much. Really appreciate it. And congratulations on all your success as well. This is a

great podcast. Really, really appreciate it.

We'll talk to you soon. Have a good one.

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