By: Eitan Lavian | Business  | 

Bird Taking Flight?

When first introduced in 2011, Uber shocked the world with its convenient alternative to traditional taxi services. With the click of a button, anyone could summon a car and reach their destination with ease, oftentimes for cheaper than the price of a cab. “Ubering” has become a sensation — the go-to for anyone in need of a quick lift. That being said, even Uber enthusiasts would think twice before using the app to go somewhere just two or three blocks away. Enter Bird, the Uber of electrical scooters.

Bird, an electric scooter rental service, was founded in 2017 — quickly raising a total of $400 million in venture capital, giving them a post-money valuation of $2 billion. Bird’s application is a cross between Uber and CitiBike. First, the user creates an account, which requires validating their driver’s license and entering a credit card number. Afterwards, one simply uses their phone to scan the barcode on the scooter, allowing the user to begin riding for a $1 base fee, and a $.15 fee for each minute the scooter is being used. In addition to providing scooters, the app provides users with a map of unoccupied scooters in their area. Additionally, it shows the battery level of each scooter, which lets rider know how far this scooter can go before dying.

The scooters can reach a top speed of 15 miles per hour. At the end of the ride, users can scan the barcode again to deactivate the scooter, and then take a picture to confirm that it’s been left in good shape. At that point, they are free to leave the scooter wherever they please, so long as it doesn’t interfere with traffic or pedestrians.

As of September 2018, Los Angeles had at least 17,000 scooters on its streets, while San Diego had at least 13,000. Using Bird scooters is both fun and convenient — battery life lasts for about 15 miles of riding. Riding these scooters is not only an easier method of transportation, but it has also turned into a fun activity. Throughout the city of Santa Monica, CA, I have witnessed the sight of friends and families ride together, enjoying both the scenery and — believe it or not — the commute. As for myself, my friends and I have used it to weave through traffic and turn a potential 15-minute commute into a 10-minute one, for under $3! The scooters also offer a solution to those college students who’d rather not bring their bikes or skateboards to school, yet struggle with the fact that their classes are far from one another.

Despite what you might think, it is very difficult to steal the scooters. Bird scooters are equipped with GPS chips and an alarm system; however, a recent problem the company has been dealing with is vandalism. Videos on social media show people knocking over rows of scooters and even throwing them off parking garages. Scoot Networks, a competitor of Bird, recently released about 650 scooters in San Francisco. Unfortunately, within just two weeks, more than 200 scooters had been stolen or vandalized beyond repair!

Another issue Bird faces is the durability of their scooters, with a common complaint among users being that the scooters are prone to damage and break down quickly. Scooters typically last a mere two months, a fact which has worried potential investors. Bird, however, has assured its investors that they have rolled out more-durable scooters. Time will tell.

Bird has also had many legal issues to overcome, a noteworthy one being the problem of underage riders. A minor can simply add an eligible person’s information and ride without the app knowing about the malfeasance. Another, bigger, issue sparked in June of 2018, when the City of Beverly Hills banned the use of Birds and other scooters for six months, the reasoning being complaints from residents about the noise and unpleasant appearance of scooters laying around the city.

As for the financial aspect of this unicorn, reports show that each scooter is able to make about $20 a day, suggesting significant profit potential given the fact that they only cost about $500 apiece. If the scooter runs out of battery, a nester — the term for an individual who signs up to charge these scooters — is notified to come and collect them. Nesters are paid an average of $5 for each scooter they charge.

Unfortunately for Bird, an increase in competition and the regulatory barriers they face have caused them to decrease their pre-money valuation and temper their capital raising expectations.

That being said, Bird’s future looks bright and has high hopes of bringing their services to New York City. This will give them the ability to offer thousands of more scooters, not to mention the opportunity to expand to greater locations. Nonetheless, they have yet to be successful in legalizing this endeavor. Imagine how easy life would be if we could conveniently ride through the busy streets of Manhattan — with just the simple click of a button.