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Transportation Businesses Technology

Bird, One of the World's Largest Scooter Startups, Lost $100 Million in Three Months (businessinsider.com) 137

Bird has its eyes on another capital raise, according to a report. Business Insider: The scooter company, one of the largest in a swarm of similar micromobility startups, has already raised $718 million in its short lifetime, according to Pitchbook data, and now it reportedly needs up to $300 more by the end of the summer. A fresh infusion could raise the Santa Monica, California-based company's valuation beyond its current $2.3 billion, potentially helping Bird pass its competitor Lime as the most highly valued startup in the space. The Information also reported that Bird lost $100 million in the first quarter of 2019, with its revenue shrinking to $15 million during the same time period.
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Bird, One of the World's Largest Scooter Startups, Lost $100 Million in Three Months

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  • by DogDude ( 805747 ) on Friday July 12, 2019 @01:13PM (#58914892)
    Ideally, I'd love to see some journalism about the people who invest in these absurd companies. I'm perpetually amazed at people throwing hundreds of millions of dollars at badly, BADLY run companies with no business plan to speak of.
    • Me, too. Of course, with crowdsourcing you may have millions of $1 investors.

    • Probably just the standard west coast angel investors. They typically invest hundreds of millions of dollars across multiple startups like these every year. I've read some articles that have mentioned that typically only 1 in 20 of their investments will actually have a decent return, but when you have a tech company turn into a success the returns are so good that it can cover going bust on the other 19 ventures that failed.

      I don't know about this particular company but considering they're selling a phy
      • How are these tech companies?
        • In the same way Uber and Lyft are.

    • by Anonymous Coward

      I've got ideas aplenty, much better ones than the crap you see getting big investment in silly valley, sitting on the back-burner, but no veecee "friends". It's not even difficult to spot real solvable things in the real world, yet the kids in the valley keep up with idiot fads. And they get "invested" in, to idiot tunes.

      So frankly, I don't think any of those "investors" really want to, you know, make money. They have to know that what they're doing is madness, in the regular "invest, make money back" sense

      • by JaredOfEuropa ( 526365 ) on Friday July 12, 2019 @02:24PM (#58915396) Journal

        Question is, why are they doing it, then?

        They do it because they think the company can be grown, operate in different countries while building a huge customer base, and subsequently be hyped up enough to be sold off to the next round of bag holders, or go public, so they can cash out. Your start-up doesn't need to work, it only needs to be sold, and there's plenty of suckers out there.

        • This is a symptom of there being too much money at the top. The super rich have a lot of invest but without a strong demand side economy there's not enough to invest in. Go look up "Negative Interest Rate Bonds" sometime. These are real. You give the gov't your money for 10 years to hold on to because you've literally got so much what the hell else are you gonna do. This is like that, but there's also the possiblily of a massive payout.

          There's one other factor nobody's talking about: the middle class is
          • by DogDude ( 805747 )
            This is a symptom of there being too much money at the top. The super rich have a lot of invest but without a strong demand side economy there's not enough to invest in.

            Absolutely. That's exactly right. It's wealthy people looking for somewhere to invest their money. The scary thing is that there's so little real value-creating business to invest in that people are throwing money at "companies" like this. We're also seeing the same thing with real estate. Real estate, especially low-end, is being sn
      • It’s not about having a viable product. It’s about getting in early enough to be able to resell. enough of your early stock to others, as well as collecting management fees, etc. The original investor group always comes out ahead.

        They really don’t care if the greater fools lose money.

    • by Anonymous Coward

      By investing in what is going to be a loser, they either set themselves up to cash out before the crash for a profit by suckering others in, or they set themselves up to take a massive loss against the next 5-10 years income tax filings. They can't really lose money on the deal as they get it back in one fashion or another eventually.

      • Capital losses don't work the way you think that they do. You don't get all of your money back you realize.

        Lets look at it from a profit side, I make an investment and make 100 dollars. I will pay 31 dollars on it (ok, maybe that needs to be millions for that tax rate). We understand that.

        Now lets look at what happens I make an investment and loose 100 dollars. If I made both of these investments in one tax year - I make no money owing no taxes. Easy... Now lets say that this year I loose the 100 dol

        • by dryeo ( 100693 )

          You have to throw in a bunch of shell companies with very tenuous connections to each other and other complex things such as bankruptcies to hide the picture from the taxman so you can claim tax avoidance for your tax evasion. Remember, it only becomes tax evasion when a Judge says so after the taxman puts in the resources to sort through a lot of paperwork designed to be opaque, a taxman who is underfunded and ordered to concentrate on certain unpopular demographics rather then the popular rich folk.
          There'

    • Well the problem is today is investors today, are flashy extroverts who want to see flashy sales pitches and to see the next media superstar CEO. Vs the old form of investors, who mostly are introverts who would rather spend time looking at the books, to determine how much to invest.

      The new Rock Star CEO's are really modern Used Car Salesmen who mostly scam investors.

      We rarely see startups that star as a small Mom and Pop shop, getting a loan to hire 3 employees. Selling more products, then growing gradua

    • I wonder whether the Fed is factoring unicorn valuations like Bird, skyrocketing home prices, bitcoin and gold price increases, stock buybacks and exploding corporate debt among other assets in their inflation models. IANAE (economist) so maybe someone can explain how what appear to be bubble markets are assessed by the Fed.
  • Does this business model even deserve to live? You can't make it up in volume if you have shrinking volume.

    • Does this business model even deserve to live? You can't make it up in volume if you have shrinking volume.

      Just as in 2000, the market is saying "No."

      Could Bird at least come up with a water-resistant scooter?

    • It's OK. I saw this before, back in 1999 I think. It's not about losing money on each transaction, it's about making it up with volume. Or something like that...
  • Just a Fad (Score:5, Insightful)

    by jwhyche ( 6192 ) on Friday July 12, 2019 @01:13PM (#58914898) Homepage

    Losing $100M in a few months really doesn't surprise me. Am I the only one who saw this as not a long term solution to anything? The biggest down side I saw to this is once you rent a scooter and get to where you are going, how do you get back? I rent a scooter, go say half a mile or a mile for lunch. I leave the scooter out side and someone else comes along and rents it. How do I get back to where I'm going if I can't find another one? It is just to undependable for real transportation needs.

    • Re:Just a Fad (Score:5, Interesting)

      by garcia ( 6573 ) on Friday July 12, 2019 @01:19PM (#58914944)

      It absolutely shocks me. I simply don't understand how they're losing any investment money because I simply cannot fathom how they raised any in the first place.

      Why are investors readily funding $1 scooters with billions as opposed to funding truly viable transit methods, instead? What are they being sold on where they believe they will honestly be able to recoup any of these dollars they're burning?

      • by psavo ( 162634 )

        They need saturation and the scooters are not cheap. Also they need to report / be collected for charging and that's not the cheapest thing ever. I'm sure a lot of that money is hardware investment too (lambo for the CEO etc.)

        • by Z00L00K ( 682162 )

          People just leave them around at random locations causing trouble for less mobile pedestrians like elderly and disabled.

          But I wonder how long it will take before someone starts harvesting them for the batteries and re-purpose the batteries for other use.

      • What are these other truly viable transit methods that you speak of? If you think losing $100 million in three months on this is a lot, look at how much states have pissed away on their big public transit projects like California's high speed rail that sucked up over $10 billion and was scrapped after new estimates put the actual price to finish it at over $70 billion, which would only further balloon over time as well. That's an even bigger money pit.

        Any alternatives amount to creating a private bus com
      • Why are investors readily funding $1 scooters with billions as opposed to funding truly viable transit methods, instead?

        Because capitalism.

        You can personally get paid well if you spin up one of these scams.

      • If you can accept that some people are dumb, or blinded by greed, then it shouldn't surprise you that some investors are dumb, or blinded by greed. They're not any different from anyone else.
      • There's a lot of dumb money around. Low interest rates and soaring inequality mean there are a lot of rich people with money to burn who don't understand technology and are hoping to invest in the next Uber or Netflix. That means money spunked on stuff like Theranos, Juicero, Overwatch League etc, and a bunch of yuppie lifestyle businesses that seemingly only exist to make the lifestyles of Bay Area programmers slightly more convenient.

    • by psavo ( 162634 )

      I don't know how "Bird" works, but the equivalent here has an app and you can see close-by scooters on the map (they self-GPS report). So just start walking back where you came from and keep a look if you have one by the route.

      • Makes no sense to me. If I have to be prepared for the necessity to walk back to my destination, I can't travel any further than I am willing to walk. If that is the case, I might as well forget about the stupid scooter and just walk.

        • by Kjella ( 173770 )

          Makes no sense to me. If I have to be prepared for the necessity to walk back to my destination, I can't travel any further than I am willing to walk. If that is the case, I might as well forget about the stupid scooter and just walk.

          Depends on the density of scooters. This year I've used the city bikes a lot, they're not like scooters in that you have fixed pick-up and return points but they can be empty/full. For my most common ride walking end-to-end would be 45 minutes. Biking about 15+5 (walk) = 20 minutes. On a few occasions I've had to either walk to the second closest station or deliver one step early, never both and it adds maybe 5 minutes. Sure in theory all the bikes can be taken all the way but the risk of that is practicall

        • That is what Uber is for.
          My big complaint for the scooters in the bay area is they become "unavailable" at 9PM so they can be picked up and charged. If I am going anywhere at night - there will be no scooter to go back on. Uber however, is 24/7. Easy enough to scooter there for 2 bucks and uber back for 5
          • by q_e_t ( 5104099 )
            I have to wonder if the 9pm curfew isn't also to stop lots of drunk people falling under cars while riding them around midnight.
          • Except Uber is another loss-making, highly subsidised dodgy startup. And 'just get a taxi' isn't much of a solution when you were expecting a cheap scooter ride.

      • by jwhyche ( 6192 )

        I don't know how "Bird" works, but the equivalent here has an app and you can see close-by scooters on the map (they self-GPS report). So just start walking back where you came from and keep a look if you have one by the route.

        This is not really an option ether. Say it take 5 minutes to where I'm going for lunch by scooter and 20 minutes walking. Taking a scooter will always mean losing that 20 minutes because I can't count on a scooter being available. I will always have to plan on walking back and losing that 20 minutes.

        • The standard response is that the scooter is just one option out of many. To get back you can take a rental bike, another scooter company, Uber car, etc.

          It really only makes sense if there are a lot of options in the area.

    • I leave the scooter out side and someone else comes along and rents it. How do I get back to where I'm going

      I had this happen (where I took a scooter somewhere, then when I got back it claimed to be shut down for maintenance).

      It wasn't a problem though, the point of having so many scooters around a city is that you can just walk a block or two, find another one, and are on your way - or worst case, use uber/lyft. In my case I walked a block and a half to where a working scooter was.

      Or you can also do what

      • by nadass ( 3963991 )
        So instead of a cost-effective rental model, your recommendation is to spend even more time and money using multiple services?

        That's the exact opposite of cost-effective.
        • your recommendation is to spend even more time and money using multiple services?

          No. One of the options was simply to keep the rental active. It all depends on how sure you want to be.

          What it means is that since time is the important factor, you'll always have a way to get back in time.

          Money is never as important as time.

    • Hide it outside or bring it in with you?
    • The biggest down side I saw to this is once you rent a scooter and get to where you are going, how do you get back? I rent a scooter, go say half a mile or a mile for lunch. I leave the scooter out side and someone else comes along and rents it. How do I get back to where I'm going if I can't find another one?

      When I was in Austin, Texas earlier this year, they were everywhere. So many scooters you were literally tripping over them. Perhaps it's a bigger problem further out, but within a few miles' rad

    • The biggest down side I saw to this is once you rent a scooter and get to where you are going, how do you get back?

      In major cities they are lying around like trash.

    • Re: (Score:2, Informative)

      by thegarbz ( 1787294 )

      How do I get back to where I'm going if I can't find another one?

      I rent a scooter, go say half a mile or a mile for lunch.

      If you're that lazy that you consider transportation for half a mile to a mile a requirement for "dependable transport" then there's no helping you.

      For those people without legs you could:
      a) taxi
      b) Uber
      c) public transport
      d) pay someone to carry your lazy arse.

      For everyone else you could just walk.

  • It is 1999 again. (Score:5, Interesting)

    by AlanObject ( 3603453 ) on Friday July 12, 2019 @01:14PM (#58914900)

    $2.3 Billion valuation on $15 Million quarterly sales.

    I'll bet their internal sales meetings are epic.

    And people call Elon Musk delusional.

    • by Anonymous Coward

      But it's not the sales that matter. It's that they are driving market impact with socially-responsible development metrics that coincide with the broader swing in societal sentiments.

    • You just terrified an entire office when I bust out laughing at youâ(TM)re post. Iâ(TM)ve been saying the same thing for a decade now. And the analysts on the street all predict this tech bubble to be twice as big as â99â(TM)s.
  • ... needs up to $300 more by the end of the summer. A fresh infusion could raise the Santa Monica, California-based company's valuation beyond its current $2.3 billion, potentially helping Bird pass its competitor Lime as the most highly valued startup in the space.

    So, does Bird need $300M for expenses or just to pass Lime in value?

    • Unlike Uber/Lyft they have capital costs. And the scooters need to be well maintained since if one breaks and hurts somebody it's lawsuit city. Sure, there's arbitration agreements and waivers in the app but at least in America our legal system can get fuzzy around those. And in any case the scooters are prime candidates for being stolen, if only for the metals.
      • by Zorro ( 15797 )

        New Plan: Steal Sccoters and mine the batteries! Lithium has more walue than these E-Scooter Ideas. Just needs one smart Mafia Guy to get started.

      • by nadass ( 3963991 )

        Unlike Uber/Lyft they have capital costs. And the scooters need to be well maintained since if one breaks and hurts somebody it's lawsuit city. Sure, there's arbitration agreements and waivers in the app but at least in America our legal system can get fuzzy around those. And in any case the scooters are prime candidates for being stolen, if only for the metals.

        They have business insurance for that.

        Hint: it does NOT cost $300M for business insurance, no matter how nonsensical the business is.

      • And in any case the scooters are prime candidates for being stolen, if only for the metals.

        Or to be thrown in a lake [theguardian.com]:

        It was just one of nearly 100 Lime and Bird scooters that have been dumped in [Lake Merritt, Oakland, CA] since late September, Robinson said. In October alone, he said, his volunteers counted 60.

        Slate has a longer article entitled, Bird Bath [slate.com]

  • once they corner the market on self driving scooters.
  • by Anonymous Coward

    Rental scooters are a nice idea. Just find one laying around, rent it, hop on, and go to where you need to go.

    Big problem is most of the scooters never break even. They cost a few hundred bucks each and don't last long enough to recoup their purchase price in rentals.

    The other problem is after renting a few times you realize the scooters are nice, and the only thing not nice is having to go find one and rent it. So you buy one for $300, and now you have a much nicer scooter that goes faster. Those price

    • So you buy one for $300, and now you have a much nicer scooter that goes faster.

      Then what?

      You leave it out to get trashed with the rest of the rental scooters?

      No way in hell would I buy my own scooter even if it was theoretically nicer, because then I'd have to be responsive for maintaining it and figure out a safe place to keep it when I was out and about in shops or eating. Same way I mostly gave up on riding my own bike around a city in favor of bike rentals.

      You mentioned scooters getting cheaper over t

      • No way in hell would I buy my own scooter even if it was theoretically nicer, because then I'd have to be responsive for maintaining it

        You could make the same argument against owning a lot of things. A home. A car.

        Birds cost $1 + 0.29 per minute. So if you rode 30m each way, that's $19.40... a day. At that cost in 10 days you could own your own scooter. If you only rode it 10m each way you could own your own scooter in 25 days.

        figure out a safe place to keep it

        There's two sides to that. Yes you need to figure out a place to keep it, but it's also always available. Always. You never have to try to find one and you'll never be stuck without one.

    • At the quantity Byrd is buying, they're not a few hundred apiece. The latest numbers I saw said the average lifespan of a scooter is like 2-3 weeks. And that the average scooter pays for itself after week 1.

  • Comment removed based on user account deletion
    • I want to short the fuck out of them.

      -jcr

      Well, they do have nice lithium batteries. Short the fuck out of them, burn baby burn!

  • Crazy investors throwing loads of cash at poor business models while other startups with real technology can't get more than 10 seconds of a VC's attention. Why didn't this company get the standard 'prove to us that you don't need our money before we will invest' line that I have heard a thousand times?
  • Comment removed based on user account deletion
  • We hardly knew ya!

    But seriously, only $15M quarterly revenue (that's $5M per month or more than $1M per week...WORLDWIDE) and expenditures surpassing $100M at the same time ($9M in weekly expenses and the bleeding is ongoing)... yeah, that burn rate comes with higher risks and less revenue potential than either car-sharing or bike-sharing services.

    Nobody will acquire BIRD for anywhere close to $100M -- much less at $2.3B valuation! Even if their scooters were flung into space or ridden all over the moo
  • But as they say if you live long enough you'll see everything.
  • Many people vandalize them in my city, and I'm pretty happy about that.

    • Many people vandalize them in my city, and I'm pretty happy about that.

      I agree. If you don't like something, physically destroy it. Like if I was your neighbor and I didn't like that unsightly car, I'd just pour on some gas and burn that f*cker.

  • by farble1670 ( 803356 ) on Friday July 12, 2019 @02:25PM (#58915416)

    I've been scratching my head on their business model ever since I saw my first scooter. Take a $250 (probably more) e-scooter, rent it for next to nothing where it gets beat to shit on rough city streets. Deal with the logistics of finding these scooters left all over the city in bushes, ditches, ravines, etc., cleaning them, repairing them, and charging them. Deal with a good percentage of them getting outright destroyed (thrown in rivers, stripped for parts).

    Deal with the inevitable lawsuits as people that have never ridden scooters wreck themselves not wearing a helmet on an e-scooter than can go 20MPH. I've ridden one and 20MPH on a scooter with hard rubber wheels and without any sort of shock absorption is no joke.

    How could they possibly be profitable? Yet in my city, Lyft has gotten in the game now and is renting scooters and bikes in competition with Lime and Bird.

    • by Bobartig ( 61456 )

      The scooters retail for around $400, although I don't know what their wholesale price is. I read previously that these scooters had no projected break-even point because their durability/lifecycle meant that they would *never* pay for themselves. Some scooter companies are moving to a more robust design that is much more expensive and durable, which probably also has no projected break-even point.

  • Pro tip: all the car sharing firms are also losing money, but faster.

    Buy your own electic vehicle. One of my colleagues uses an electric solo wheel, and other people I work with own their own electric skateboards and scooters. They're great for nearby commutes.

  • Electric scooters of all types are a real menace here in the DC Metro area. Every morning commute these idiots zoom down the sidewalk, weaving in and out of pedestrian traffic, breaking the law in the same way that bikes do but in far more boneheaded ways... such as being on their phone.

    For the worst offenders, I fantasize about a game I call Scooter Tipping. Look for someone on their phone or otherwise behaving badly. Give them a small shove perpendicular to their direction of travel. As they get up,

    • by Shotgun ( 30919 )

      Not to mention being parked in the middle of the sidewalk. . . diagonally. I have literally kicked them into the gutter to get them out of the way. It would be different if the street wasn't already littered with the ugly things. If I can't leave random trash on the side of the road, why can they?

      • you know, i've seen a few lying there during my morning walk, never thought about people tripping, etc until i got involved in this /. discussion. I see no reason at all not to forcefully throw them out of the way into the gutter... the company can charge the rider. Have also heard of people throwing them into the water. Someone smart on here should figure out a quick way to disfigure/disable these scooters if you happen to come across one in the sidewalk.

    • The use of powered vehicles on the sidewalk is permitted in your country? Its not in ours.

      The use of powered vehicles is permitted on the roads however. As long as the vehicle has it's certificate of roadworthiness, it's registered keeper has paid it's road tax, has a legible (at 20m) registration number, and the driver has a license for the class of vehicle on the public road (both tracked through the registration number). Oh - it has to have directional indicators too. If it has that, your powered vehicl

      • There's a patchwork of laws and can vary city to city. In general even bicycles not allowed on sidewalk, but rarely enforced. In Washington DC specifically the rule is no bikes or scooters on the sidewalk within the central business district. Yet police are utterly disinterested in enforcing the rule, and e-scooters are so new that laws making them liable for misuse of their product haven't been passed yet.

        • Getting enforcement is a problem here too. People want - and vote for - low taxes, then scream blue bloody murder when the police don't have the manpower to deal with minor crimes.
          • I screamed at someone on a scooter today to get off the sidewalk. It was so spur of the moment it came out at 1/3 the volume I'm capable of. Will keep practicing

            • I know the feeling with respect to bikes on the pavements. Unpowered scooters are bad enough. I hope the police use the recent roundabout death as grounds to publicly throw the book at people using powered scooters on the road or pavements. On the pavements, that would probably be obstruction, maybe a Section 5 (conduct likely to cause a breach of the peace) and public endangerment. On the road, let's see - an unlicensed vehicle, no road tax, registration or insurance (that alone will be an immediate loss o
  • I live in the DC metro area, and I have yet to ever bother taking one of these scooters. I'm often out in Baltimore, where they're in widespread use too. But again, haven't found a point to taking one.

    Everyone I've talked to who thought "they're a good idea!" admitted they've either never used one yet, or they only did it once because it was "fun" ... maybe going to or from a ball game or something.

    Practically speaking? They're a disorganized mess of a business model. I mean, you're going to invest in all

  • ...because you don't have to carry your dignity along for the ride.

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