Caution : You may not complete this operation on Ubuntu 16.04.01. Wait for Ubuntu 16.04.02, or use Ubuntu 14.04.
This page describes how to install Ubuntu onto a USB memory.
You need at least 8.5 GB disk space to install Ubuntu 16.04. I recommend nominal 16GB as described in this page.
Choose the "Something else", then click "Coninue" button.
Choose the partitions in the USB memory, and click the minus button as above to delete it.
Choose the free space and click the plus button as above to insert a dummy partition.
Set a small number to the Size field, choose the root for the Mount point, then click the "OK" button.
Choose the free space and click the plus button as above to create a swap partition.
Set the partition size 4096 in the Primary partition at the End of the disk space as a swap area, then click the "OK" button.
Choose the dummy partition and click the minus button to delete it.
Choose the free space and click the plus button to add a root partition.
Choose the Primary partition and the mount point as a root then click the "OK" button.
Choose the disk and the device to boot, then click "Install Now" button.
Click the "Continue" button.