We recently talked about Lime transitioning from the traditional Juicer model to using Logistic Partners. The big question with that is not IF, but WHEN it will impact your area. We can be sure the transition will happen in the next few years as Lime continues to introduce interchangeable batteries worldwide. So, we established the basic requirements to become a Logistic Partner as these:

Registered business entity
General liability insurance
Access to a fleet of vehicles
Ability to manage sub accounts
Follow state and federal laws and regulations

Once you meet the basic requirements, you can apply to be a Logistic Partner with Lime. But just because you CAN start a new business DOES NOT mean it’s the right move. As with any business venture, I highly recommend consulting legal counsel, an accountant, and a tax expert for more individual advice and assistance through the process.

Initial Business Startup Costs –

Depending upon your business structure, insurance premiums, and use of legal services, it will cost between $150 to $705 dollars to get your business started.

Registering As A Business Entity	$110 – $150
General Liability Business Insurance	$40 – $55
Legal Services*	$0 – $500
Total Startup Costs	$150 – $705

*Legal Services not required but highly encouraged

However, the cost of keeping your business running is going to be a lot more than that! One factor that is out of your control is what type of scooter Lime has operating in your area.

Gen 4 Vs Older Scooter Models

If Lime is using Gen 4’s, they have interchangeable batteries that can be dropped off and picked up from the local Lime warehouses. This can be a very simple and straightforward process of just swapping out batteries. If Lime has not expanded Gen 4’s to your location, you will need to manually charge each scooter. This complicates the process a lot! You now need to factor in the time it takes to load and unload scooters, how long you need to charge each scooter, and where the scooters will be kept while charging.

https://www.li.me/blog/limes-gen4-e-scooter-rolls-into-cities-worldwide

Unfortunately, what model Lime has operating in your area is out of your control. But it is a key factor to consider when evaluating your business potential. Especially if your area is still operating on older models because the evitable switch to interchangeable batteries will drastically alter your daily tasks.

Location, Location, Location

Another key factor that may or may not be out of your control is your location. Lime has scooters and bikes available to customers twenty-four hours a day, 365 days a year depending on your location and the seasonal weather changes. If you live in a colder state, winter means a layer of snow and ice that scooters and bikes just don’t work well on. If customers are not using scooters or bikes, then there are no tasks for you and your workers to complete. You could be out of work for a few months each year and have to rebuild your work force every spring, making it hard to retain quality workers.

Hiring Employees Or Contractors

Regardless of where you are and what model Lime is using, you still need to determine if you want employees or contractors working for you. Ultimately, paying your workers will be your biggest business expense. Lime leaves the choice of hiring hourly employees or independent contractors to each individual Logistic Partner.

Independent contractors are self-employed workers who typically cover freelance type work. They have a set task to complete but have the ability to make decisions on how they complete the task. Generally, contractors are cheaper for the company to work with because they are not paid as employees are. Instead, the company simply pays a set rate for the designated work and calls it a day.

Having traditional employees means a set schedule can be established and you can ensure that tasks are being completed when it is best for your business. This allows for a reliable business process and adds a safety net as far as task completion is concerned. However, this complicates the management side of the business. You will need to handle scheduling conflicts, last minute call outs, and general staffing issues.

Also, paying employees is a lot more complicated than paying contractors. With employees the company must pay the employer portion of taxes which is 7.65% of their base pay. You must also follow FSLA standards including the federal minimum wage of $7.25 an hour and at least time and a half for any overtime. And you must adhere to all federal and state labor laws. Generally, the true cost for an employee is 1.25 times to around 1.4 times the base wage. So $7.25 an hour really means $9.06 to $10.15 an hour as long as your state doesn’t have a higher minimum wage, which some do.

How Does The Difference In Scheduling And Pay Impact Logistic Partners?

Let’s say there are 25 scooters that need to be charged or have their batteries swapped out. With a contractor, they can choose to only complete 10 of those tasks and then call it a day. You can’t make them complete the other 15 remaining tasks even though those tasks still need to be done. With an employee, if they are scheduled to work and have enough time to complete all 25 tasks, they must do so, or they may lose their job.

Pretty straight forward, right? Let’s look on the flip side, your employee might be scheduled to work 4 hours and completes their work in 3 hours. Are you going to lose money by having an employee standing around doing nothing for an hour? Or do you send the employee home early without hitting their desired hours? What if the tasks take longer than anticipated and the employee works 9 hours instead of their scheduled 8 hours?

You are required to pay employees for their time worked regardless of how efficient (or inefficient) they are. In some states, overtime is calculated for any time worked over 8 hours or 12 hours in a single day. In others, overtime is calculated for more than 40 hours worked in a given week. Remember, overtime is paid out at time and a half, which is why contractors may be appealing. They have set tasks to complete and don’t come with the same pay concerns.

Now, you cannot hire contract workers and treat them like employees. Labor laws offer protection against misclassifying employees as contractors. Companies can be sued and lose a substantial amount of money and public respect if they are caught mistreating their workers. As a Logistic Partner, you need to be aware of the differences and follow the labor laws with your workers.

Regardless which path you take, you will run the risk of hiring too many or too few workers. You will have to consistently evaluate your market area to determine how many workers you need. Hire too many and you risk them being unhappy with how much they could potentially earn. Hire to few and you risk not having enough tasks completed to keep your business afloat.

Besides scheduling and basic pay for your workers, there are still additional factors to consider. If Lime is operating older models, do you want your business to maintain a warehouse for workers to charge scooters in one location? If you use traditional employees, do you want to build up a fleet of business owned vehicles, rent vehicles from a local rental agency, or reimburse your employees for their personal vehicle use? Let’s take a deeper look at these factors.

Warehouse Or Not To Warehouse

Some Logistic Partners operate a business warehouse. However, I would highly recommend avoiding one if at all possible unless you own if outright. Especially if you live in a colder, snowy winter area. When the demand for scooters dries up every winter, you would be stuck paying rent and other fees to maintain the warehouse while not earning income.

Lime is typically based in areas on an annual contract that may or may not be extended year after year. Even though Lime is expanding, they have continued to lose contracts with cities they once operated in. Lime could also cut ties with your business, and you could be stuck paying rent on an expensive warehouse.

In addition, Lime generally has their own warehouses in cities where they operate. Once Lime transitions your area to the Gen 4 scooters and bikes with the swappable batteries, you would really have no need for a warehouse space anymore. If Lime needed you to operate a warehouse because they didn’t have one set up in the area, I would make sure your contract with Lime takes that into account legally and monetarily.

To Own, Rent, Or Reimburse Business Vehicles

If you choose to hire traditional employees rather than independent contractors, you will need to provide the tools and equipment necessary for them to complete their jobs. Since Juicers typically use a vehicle to pick up and move scooters around your business would either need to provide transportation or compensate your workers that use personal vehicles for work tasks.

This would include the gas, repairs and vehicle maintenance, overall depreciation, and insurance required for the employee’s work-related driving. This is typically done with a mileage reimbursement or a lumpsum payment on top of the employee’s regular wages. For the remainder of 2022, the IRS standard mileage rate is $0.625 per mile. Driving even 50 miles a day will add up really quick!

Either way, you will need to track all work mileage and have a system in place to inspect vehicles for damage incurred while on the job. If you own a business fleet of vehicles, you will need to conduct routine maintenance and have insurance. You will also need to cover the cost of repairs and legal fees for accidents. If you rent vehicles, you will have to factor in how much money it will cost each month.

The Financial Side Of Being A Logistic Partner

We’ve explored briefly the many different factors that will impact a Logistic Partners business. Now, let’s go more in-depth about the financial side to determine if it is really worth investing your time and money in pursuing. Keep in mind Lime controls the prices, location drop-off sites, and how many scooters can be placed or picked up at any given time. So, this information will not be one-hundred percent accurate because I’m not Lime and I don’t have complete access to their information. I am simply doing the best I can with the most accurate information and data I can find.

Lime pays varying rates for each task in different cities. States have different minimum wages, fuel and maintenance costs, and taxes. Because there are so many variables, it is difficult to see how the different factors impact costs vs returns in a concise manner. So, I am going to breakdown the various factors for three different locations to give a general overview. Those locations are –

Los Angeles, California
Austin, Texas
Washington, D.C.

Now, let’s take a look at how Logistic Partners make money.

How Do Logistic Partners Make Money?

Lime pays Logistic Partners with a “per task rate” for each scooter or bike task that is completed. In addition, Lime also pays out bonusses for different things like completing a certain number of tasks in a certain timeframe or similar things. Those bonuses can be a huge make it or break it for Logistic Partners. From the limited data I have seen, those bonuses can be between $2,000 to $3,500 a week and even more depending upon location and Lime. But those bonuses are not guaranteed and may differ for each Logistic Partner. The gist of it is, the more tasks Logistic Partners and their teams complete, the more money they make especially with bonuses.

Here are the estimated Logistic Partner pay rates, per task, in each city.

	Los Angeles, CA	Washington, DC	Austin, TX
Battery Swap	$2.50	$5.00	N/A
Move Bike	$5.00	$8.75	N/A
Move Scooter	$5.00	$6.25	$5.00
Retrieve Scooter	$5.00	$6.25	$2.50
Deploy Scooter	$3.25	$4.25	$2.50
Charge Scooter	N/A	N/A	$6.50

Estimated “per task rate” for Logistic Partners (does not include business expenses including labor)

Los Angles and Washington, DC are operating the Gen 4 models with swappable batteries. Austin has not made the switch yet meaning all scooters need to be picked up and manually charged individually.

How Do Logistic Partners Pay Their Workers?

Since Lime pays a specific “per task rate” to Logistic Partners, the Logistic Partners will then turn around and pay their workers either an hourly rate as traditional employees or by pay them as independent contractors with a similarly specified “per task rate”.

Paying Independent Contractors

Most Logistic Partners are using independent contractors rather than traditional employees and are taking a percentage off of the top between 20% and 25%. Some Logistic Partners have a warehouse and charge their independent contractors a “per task fee” to use the warehouse to charge scooters. Those Logistic Partners are still taking the same cut off the top, it just looks a little different from the workers perspective.

Here are the estimated independent contractor pay rates, per task, in each city.

	Los Angeles, CA	Washington, DC	Austin, TX
Battery Swap	$2.00	$4.00	N/A
Move Bike	$4.00	$7.00	N/A
Move Scooter	$4.00	$5.00	$4.00
Retrieve Scooter	$4.00	$5.00	$2.00
Deploy Scooter	$2.50	$3.50	$2.00
Charge Scooter	N/A	N/A	$5.25

Estimated “per task rate” for independent contractors under Logistic Partners

Paying Traditional Employees

If the Logistic Partner hired traditional employees instead, like legally required in California, it gets a little bit more complicated. Each of these cities have different mandated minimum wages for traditional employees as well. Austin falls under the federal minimum wage of $7.25 an hour, Los Angeles has a state minimum wage of $14.00 an hour, and Washington, DC has a minimum wage of $16.10 an hour. These wages don’t include the required benefits and taxes paid by the employer, so let’s add those in as well.

	Los Angeles, CA	Washington, DC	Austin, TX
Minimum Wage	$14.00	$16.10	$7.25
Minimum Benefits	$1.43	$1.43	$1.43
Actual Cost	$15.43	$17.53	$8.68

Legal Minimum Wage For Each City

Now that we have the true hourly cost, we need to factor in the cost for transportation and fuel. You can either provide vehicles for your workers to use or you can reimburse them for using their own personal vehicle. Either way, you will need to cover the cost of gas used to complete the work.

The Cost Of Gas

In order to estimate how much fuel it would take, we need to look at how many miles an employee would drive in a typical day. Now, we need to look at this from two sides. The first is swapping out batteries and the second is handling physical scooters that need to be loaded/unloaded for manual charging.

When it comes to swapping out batteries, let’s estimate that about 310 minutes or about 5.25 hours to load up, swap out, and unload around 100 batteries. Which is about 2.5 minutes per battery exchange with an hour of time to cover the loading/unloading of the batteries, plus the travel time to and from the first and last scooters. So, let’s estimate about 110 miles driven each day, per worker.

When it comes to handling older model scooters, let’s estimate that about 90 minutes to pick up a load of around 20 scooters. Which is about 3.5 minutes per scooter and allowing for 20 minutes travel time to and from the first and last scooters. Then another hour to redeploy the scooters back into the city after charging them. Which would be 20 scooters in about 2.5 hours, not counting charge time for the battery. If someone works an 8-hour shift, they would only be able to complete about 2 rounds. And depending on how long it takes to charge the scooters, they might be pushed into working more. So, let’s say 2 rounds at about 25 miles each trip equals around 50 miles each day, per worker.

_{I am estimating the time and mileage off of personal experience, this YouTube video, and guess work since it varies so much.}

	Los Angeles, CA	Washington, DC	Austin, TX
Average Gas Price	$5.63	$3.80	$3.22
Estimated Daily Miles	50 / 110	50 / 110	50 / 110
Daily Cost (20mpg)	$14.08 / $30.97	$9.50 / $20.90	$8.05 / $17.71

Average Gas Price For Each City

The Cost Of Providing A Work Vehicle

If you wanted to provide vehicles for employees to use, you have a couple options. First, is to lease vehicles that can be used by employees. The second is to own or purchase a fleet of vehicles to use. Keep in mind if you own the fleet, you will need to cover the additional costs or insurance, maintenance, and keeping the vehicles legal.

Monthly Expense	Rent A Cargo Van	Purchase Van
Vehicle Payment	$1,500	$430
Insurance	–	$142
Maintenance	–	*$100
Registration	–	**$4
Total Monthly Cost	$1,500	$676
Total Daily Cost	$50.00	$22.54

*$1200 estimated annually – **$50ish annually

The Cost Of Reimbursing Mileage

But what if you choose not to offer work vehicles to your employees. What if they had to use their personal vehicle and you reimbursed them, what would that look like? Remember, the IRS standard mileage rate for the rest of 2022 is $0.625 per mile. If your employee drove 50 miles a day, you would owe them $31.25 in reimbursement. If they drove 110 miles a day, you would owe them $68.75 in reimbursement.

	CA		DC		TX
Rental Vehicle	$64.08	$80.97	$59.50	$70.90	$58.05	$67.71
Business Owned	$36.61	$53.51	$32.03	$43.44	$30.58	$40.25
Reimbursement	$31.25	$68.75	$31.25	$68.75	$31.25	$68.75

Average Daily Cost For 1 Vehicle/1 Worker

The Cost Of Providing A Warehouse

The only other major factor to consider is if you want to provide a warehouse or localized space for charger older model scooters. Renting or purchasing a warehouse is very, very expensive. Even if you own the warehouse outright, you will still be required to pay annual property taxes and cover utilities expenses to run the facility.

	Los Angeles, CA	Washington, DC	Austin, TX
Warehouse Rent	$8,000	$8,667	$10,000

Estimated Monthly Rental Cost For 8,000 sqft Warehouse

Breaking Down The Numbers

Let’s bring all this information together and get a clearer picture. We broke down 100, 200, and 300 scooter charges/battery swaps a day. Then we went ahead and looked at the possibility of scheduling two separate shifts a day, to see how the numbers worked out. We factored in estimated income, operating expenses, and taxes to account for estimated gross monthly income.

Let’s also factor in some estimated monthly bonuses from Lime. Keep in mind, these are not guaranteed bonuses and are going to vary greatly depending upon location and your business operating numbers. If you can’t keep your business afloat without the bonus, it’s probably a bad idea to move forward.

Logistic-Partner-Number-Breakdown Download

We can easily see that using traditional employees is not going to be cost effective in Los Angles, California even with potential bonuses. Washington, DC also makes a strong case for using independent contractors rather than paying such high hourly wages. We can also see paying the minimum wage in Texas is more cost effective than paying a “per task rate” to independent contractors.

While using independent contractors may be the easiest, from a labor management perspective, it won’t always bring in the most profit for your business. And remember, these numbers don’t reflect all the expenses and issues that will come up. It focuses on only paying the bare minimum to employees without offering benefits or retirement plans. The more workers you have, the more time, money, and effort will be required to manage them.

Competition With Other Logistic Partners

If you are the only Logistic Partner operating in an area, this becomes a lot simpler to run the numbers and operate your business. But, if Lime has more than one Logistic Partner operating in your area, which is really common, your profit margins are going to be impacted. We know that Lime wants to have 6 Logistic Partners in place to manage scooters in Seattle, Washington.

You can control (or attempt to control) how many people you have working under you. But competing with multiple Logistic Partners could push you below the bottom line. It really depends on your area’s market. Lime has fleets of a few hundred to a few thousand scooters operating in various locations.

Should You Become A Logistic Partner?

If you are already working almost full time as a Juicer, the switch could be a really good thing. If you are looking for a new business venture, there will be a bigger learning curve. Regardless, you can still succeed as a Logistic Partner if you make smart business moves. You need to take into account all of the different factors before jumping in.

Take your time and make smart, practical decisions for your own business. It’s not a one size fits all approach, and you get to call the shots with your business model. You can make good money working as a Logistic Partner for Lime, but it will take more time and energy than you think it will.