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Hit by Big Loss, Bird Seeks $300M in New Funds

• deleted 7y ago
  [deleted]
• ccffph 7y ago
  Paywall. Full article text below: --------- The wintertime was bleak for Bird. In this year’s first quarter, the electric scooter operator lost nearly $100 million while revenue shrank sharply to only about $15 million, people familiar with the matter said. In the spring, it told people it was down to about $100 million in cash, even after raising more than $700 million over a year and a half. It’s well known that scooter companies struggled in the colder months of the year, but the depth of Bird’s problems hasn’t been previously reported. Now, the company that unleashed the global scooter craze is trying to raise hundreds of millions of dollars more in venture capital by convincing investors that it has started to turn around, recording what one person familiar with the figures said was double-digit revenue growth each month since February. Prominent in its pitch is previously unreported internal data, obtained by The Information, that aims to show Bird’s new scooters are durable enough so that each ride makes money. THE TAKEAWAY • Bird lost nearly $100 million in Q1 • Internal data points to improvements • Company seeks $200M to $300M from investors Bird insists it has turned a corner. It says it has been slashing the costs it has to pay per ride to repair, charge, insure and replace its vehicles. That’s largely because the vehicles are heavier and made up of new types of components that make them more difficult to steal. The progress is renewing optimism among some current investors. The company is projecting solid growth in the summer months, when it expects to break even, excluding capital expenditures. “After a lot of hard work and innovation over the winter, Bird has emerged in full force with spectacular growth across markets,” David Sacks, a Bird board member and general partner at Craft Ventures, said in an email. Bird has been having conversations with investors about raising more money for several months, people familiar with the matter said. It has told potential investors it wants to raise $200 million to $300 million by the end of the summer. The company is seeking to raise at a higher price than its current $2.3 billion post-money valuation, which it attained last summer after less than a year of existence. Since then—when it was able to increase its valuation from $1 billion to $2 billion in just a few weeks between deals—the investment frenzy has cooled. Many large funds, including SoftBank’s Vision Fund, have explored investing in scooter firms but have been worried about the potential size of the market and the durability of the vehicles, the people said. One Bird investor blamed negative media coverage for the growing difficulty to raise money. “The scooter industry has the most uncertainty in consumer tech today. No one knows what’s going to happen,” said an investor in a rival scooter firm that also explored investing in Bird. “Are cities going to allow it? Are the unit economics going to work? Will the payback period [for purchasing scooters] be two months and it will all work?” "Bird executives have been open about the company’s decision to sacrifice growth to trim losses over the winter." Bird executives have been open about the company’s decision to sacrifice growth to trim losses over the winter. The pitch from Bird and other scooter operators: The key to financial success is improving the hardware, so that scooters require minimal repair and can survive for hundreds of rides before needing to be replaced. Bird is trying to overhaul its fleet by replacing scooters that break down easily with longer-lasting models. About 80% of its fleet—which CEO Travis VanderZanden has said is in the “hundreds of thousands” of scooters globally—is made up of these tougher, Bird-designed scooters, a person close to the company said. In the third and fourth quarters of last year, Bird said it generated about $25 million and about $40 million in gross revenue, respectively, the person said. Net revenue was more than $20 million in the third quarter and about $25 million in the fourth quarter, this person said. Some of that gap was due to rider discounts, which Bird eliminated in the first quarter of this year, when it pulled in just $15 million in gross revenue. A year earlier, in the first quarter of 2018, Bird generated several million dollars in revenue when it was in few markets, said a person briefed on the matter. Bird executives, including Mr. VanderZanden, have been open about the company’s decision to sacrifice growth to trim losses over the winter. After the $100 million loss in this year’s first quarter, Bird made several quick moves to reduce its cash burn. It laid off about 5% of its staff, including cuts to its government relations team. The company’s service was “paused” in 44 of its 103 North American markets, it told Portland, Ore., regulators in April. As cash has run low, Bird also has been finding new ways to get more money in the door. It started requiring customers to pre-load money into Bird’s app rather than paying per ride. (Lime, a rival, has a similar process.) Bird also began selling its scooters to customers directly for $1,299, which required a $149 deposit for pre-orders. And other companies can buy Bird’s scooters, too, giving Bird a cut of revenue, an arrangement it has with a scooter rental company called Sherpa in cities like Los Angeles. Bird told existing investors recently that, over two four-week periods in May, June and July, the newer versions of its scooters, known as Bird One and Bird Zero, pulled in more revenue per ride on average than the company had to spend on repairs, replacement, insurance, payments operations and charging costs. The contribution margin, or revenue that remains from each scooter ride after costs, for those four-week periods ranged from 15% to 30%, according to the company. The figures exclude R&D and general and administrative expenses such as staff salaries and stock payments. Bird’s presentation to current investors, portions of which are analyzed below, contains detailed information on the company’s revenue and operational costs: The sample: In the presentation to investors, Bird breaks down its revenue and costs on a per-ride basis using two four-week periods of average usage from May 6 through June 2 and from June 10 to July 7 this year. The data only reflects use of the Bird One and Bird Zero scooters, the majority of Bird’s global fleet. Revenue: Gross revenue for each ride ranged from $4.12 to $4.27, up from the $3.65 that Bird told investors last year. That is likely due to Bird’s increase in prices in April, which shot up in some cities to 30 cents from 15 cents for each minute of riding. The cost to start a ride has typically stayed at $1. Net revenue from each ride in the samples ranged from $3.72 to $3.82 because of discounts. Depreciation: Bird’s largest cost per ride is depreciation, or the decline in value of its scooters. Depreciation, as calculated by the company, is a four-week trailing figure taking the total depreciation expense for that time and dividing it by the total number of rides, a person familiar with the matter said. Currently, that figure ranges from $0.94 to $1.17 per ride, or about a quarter of revenue for each ride, Bird says. That implies the scooter would last between 550 and 650 rides before needing replacement, which is about six months of use, assuming each scooter is ridden about three times per day. That calculation is based on the total cost of manufacturing, transporting and paying the import tariff for each scooter, which is $660, a person familiar with the matter said. Bird also includes what it calls “accelerated depreciation” in its calculation, in which the company writes off the remaining value of scooters that are stolen. That accounts for the bulk of the improvement in depreciation cost, another person said. Payments and insurance: About 25 cents, or 6% of pre-ride gross revenue, goes to payment processing fees and insurance. Last May, that figure stood at 46 cents. Executives at other scooter firms caution that Bird likely has difficulty knowing the full extent of its potential insurance costs in the four-week sample it used because of larger claims that could come later. But Bird executives have told people that scooters see fewer at-fault collisions than in ride-hailing. Charging: To charge each vehicle, Bird says it pays between 79 cents and 93 cents per ride, or roughly a fifth of per-ride revenue. That’s down from $1.30 last May. Assuming the company pays its independent contractors $5 for each charge, the figure would imply that Bird charges each vehicle once every five or so rides, or roughly every 10 miles. That suggests Bird isn’t making use of the 30 miles or so it says its scooters’ batteries can last. Chargers often need to move scooters to different parts of cities, which drives up costs. Repair: To repair each vehicle, Bird says it pays 32 cents to 44 cents per ride, or 8% to 11% of gross revenue. That’s down from 51 cents last May. Bird says it reduced costs even while hiring more expensive labor. In the spring, the company started hiring its own mechanics who work out of regional service centers, rather than relying on independent contractors.
  • jumbopapa 7y ago
    Thanks. I tried to use Outline for it, but it wouldn't work.
  • YeahSureWhyNot 7y ago
    What's with downvoting on HN? The guy just copied full text of the article for convenience of your reading but he gets a downvote? Stop being such assholes
    • jonas21 7y ago
      Blatant copyright infringement? If you don't like the paywall, fine. Find another source to link to. Or go out and do some research yourself and write an article.
    • lotsofpulp 7y ago
      Should people also not downvote links to other copyrighted media such as movies and music that the publisher has not authorized?
      • YeahSureWhyNot 7y ago
        the publisher has authorized HN to view it. the guy who works there has commented about it on another thread.
        • lotsofpulp 7y ago
          That information wasn't available until later, so I would expect people to downvote just as they would with any other copyright infringement.
        • dang 7y ago
          The publisher didn't authorize HN users to copy the text into the thread though. While I have you: could you please stop posting unsubstantive comments to Hacker News? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
• ceejayoz 7y ago
  > Executives at other scooter firms caution that Bird likely has difficulty knowing the full extent of its potential insurance costs in the four-week sample it used because of larger claims that could come later. But Bird executives have told people that scooters see fewer at-fault collisions than in ride-hailing. That seems like a highly misleading comparison. They're comparing Uber/Lyft contractors with Bird customers here.
• docker_up 7y ago
  Bird scooters is a completely unviable business. It lacks revenues during the rain and winter and when it's dark. One user using it for an hour completely drains the battery and it's unusable until someone picks it up and charges it. It needs to be redistributed every night to popular locations which causes even more cost. As well, damage to electric scooters is almost at a sport-like level now. The only way they can make it more cost beneficial is if they charge less if the rider drops off their scooters at a charging station and higher costs if they just dump the scooter anywhere. But that is more costs for Bird. Second is if they franchise out the business to "entrepreneurs" that handle things for them and they just concentrate on the app. But that's not a multi-billion dollar business. There is no path where Bird becomes a viable business that grows into its absurd valuation.
  • easytiger 7y ago
    to boot they are facilitating the hostile usability of urban areas for pedestrians now terrorised by idiots on these.
    • ctoth 7y ago
      Given that before self-same idiots would be driving two ton death boxes, this seems like a pretty good trade off to me.
      • bongobongo 7y ago
        I've never seen somebody drive a car on the sidewalk. I see scooteridiots going 15+ MPH on the sidewalk all the time.
      • organsnyder 7y ago
        We don't have them in my city (thankfully), but in the cities I've visited most of the people using them were teenage joyriders who would otherwise be walking.
        • elygre 7y ago
• jadbox 7y ago
  As someone living in Los Angeles, I used to take a Bird all the time because there was always one nearby when I had to go somewhere. However in the last two months, this has dramatically changed. Now the closest scooter is on average a 10m walk, which really takes away the convenience. I'm not the only person in my neighborhood that are not talking about buying either a scooter or an e-Bike. It seems if they can't get their fleet numbers higher, that they risk customers going the buying route, especially when the costs of scooters has gone down over time.
  • syntheticcdo 7y ago
    I had the same experience. Got hooked on the Bird/Lime craze and decided I was done dealing with playing the lottery of "will there be a scooter nearby, and if so, will it be in good condition?". Even with my mild usage, it made more sense to me to own rather than rent. Much to Bird's chagrin (probably) rather than going with the overpriced, under-powered buy your own Bird (https://shop.bird.co/ https://shop.bird.co/), I've put the deposit down on the Boosted Scooter (https://boostedboards.com/vehicles/scooters/boosted-rev https://boostedboards.com/vehicles/scooters/boosted-rev).
    • barkingcat 7y ago
      This boosted scooter looks pretty good! hope the product is as good as their promo materials.
  • beowulfey 7y ago
    They started (somewhat illicitly) in certain smaller areas (museum row, Koreatown, etc), but they've now expanded to near everywhere during the formal LA trial period allowed by the city council. I doubt the raw number of scooters changed all that much, so it's probably just a density problem as they've spread them throughout the city more.
  • css 7y ago
    Used Bird for about a week when it was new, decided to buy my own (a Glion Dolly) when my city banned them. Used it on my commute every day for the past year (except during rain). Not using a car in LA has been an amazing positive lifestyle change.
• ballmers_peak 7y ago
  Correction: Hey everybody! Jay from The Information here. We are testing out unlocking articles for HN readers as we are big fans. Here's this article unlocked! https://www.theinformation.com/articles/hit-by-big-loss-bird-seeks-300m-in-new-funds?pu=hackernews38uvpt&utm_source=hackernews&utm_medium=unlock&utm_content=bird-big-loss https://www.theinformation.com/articles/hit-by-big-loss-bird...
  • minimaxir 7y ago
    You may want to add to your HN profile that you're a writer for The Information; when I saw that link yesterday I thought it was spam.
    • ballmers_peak 7y ago
      Good call. Just updated.
  • zmanian 7y ago
    Seems like that is a link to a Tesla article?
    • melvinmt 7y ago
      This is the right link I guess: https://news.ycombinator.com/item?id=20412622 https://news.ycombinator.com/item?id=20412622
  • sambroner 7y ago
    Thanks Jay. If you could change or respond with a direct link (that link points to an Elon Musk article)
  • YeahSureWhyNot 7y ago
    the article in link is about elon musk not bird scooters
  • jeremyjh 7y ago
    This link takes us to a Tesla article.
• TheGRS 7y ago
  Lost revenue seems like a combination of bad weather seasons as well as cities outright banning the devices at times. We re-introduced them back to Portland just a couple months ago and Bird doesn't have nearly as big of a presence this time around. But ultimately, scooters seem like the ideal ride in the summer and not in the rainy, cold, dark winter. I'm not gonna ride one in those conditions at least.
• stuqqq 7y ago
  I have a hard time understanding why investors like these types of companies? Is there even a profitable example? Maybe they can still make lots of money from an IPO... how are they difficult from scammers?
  • jchallis 7y ago
    Think bigger fool. Like art, if you are willing to have someone invest and take your risk later ... it can make sense until the music stops.
  • mushufasa 7y ago
    I can think of several reasons 1) compelling if it all works out. Invest clear-eyed and hope the founding team figures out the roadblocks. 2) Pattern-matching / top-down portfolios. Mobile apps. Sharing economy. Subscription businesses. Electric Vehicles. Internet of Things. A lot of investors decide on themes for portfolio before they look at investments. Scooter sharing ticks a lot of boxes. 3) Adverse selection. It's a simple idea - anyone can grasp scooters as subscription. So the simplest-minded investors chose this rather than more subtle ideas. 4) as another comment suggested, investors are playing a game of musical chairs between funding rounds. Chamath Palihapitiya claims this as the reason his firm is stepping back from VC -- so he's walking the talk here https://www.cnbc.com/2018/10/10/start-up-economy-is-a-ponzi-scheme-says-chamath-palihapitiya.html https://www.cnbc.com/2018/10/10/start-up-economy-is-a-ponzi-...
  • goobynight 7y ago
    It's a product tons of people do/will use in every city in the US that doesn't require physical presence, aside from chargers on contract. How many products can you say that about? There are only a few things nearly everyone wants: food, housing, transportation, utilities, sex, clothing, medical care, hair cuts, google search. Nearly all of those require constant in person staff and/or have a ton of regulations. The exception here is Google, which is why they are killing it. Google search-and software in general-makes money while people sleep and doesn't require linear addition of staff to scale. Other stuff that people buy: e.g. video games, movies, trinkets, rock climbing gym memberships come down to people's personal taste and they might even want some variety (e.g. making a sequel). Everyone wants transportation though and they're OK with the same thing every day, as long as it works. This is a case where they are taking something with absurd demand and looking for the profit second.
• mushufasa 7y ago
  >> Bird charges each vehicle once every five or so rides, or roughly every 10 miles. That suggests Bird isn’t making use of the 30 miles or so it says its scooters’ batteries can last. that makes sense. Any growth oriented company would much rather lose margins by prematurely charging than risk having an user run out of battery and churn. I don't see that changing much post-saturation. I could imagine this flaw in unit economics being overlooked by investors and omitted in pitches. Doesn't this destroy the unit economics? Only way around it would be paying independent re-chargers per % refill rather than flat per charge? But I think I remember some firm trying that and the re-chargers would just run it down in their sheds...
  • john-foley 7y ago
    They could be lying about the 30 mile range. That was my first (cynical) thought.
    • atwebb 7y ago
      Or it is under ideal conditions/weight, if you use a smaller example rider but users tend to be heavier (maybe scooter riders don't like walking as much?) then that would lead to reduced mileage, pure speculation of course.
  • jonlucc 7y ago
    I'm pretty sure there's some serious dropoff in power with lower battery level. I will walk a bit further for a 100% battery scooter rather than take one with ~60% for that reason.
  • UncleEntity 7y ago
    Probably has more to do with the charging people than any bird plan. Was chatting with someone who does that a while back and they go out and collect as many as they can find since they get paid per scooter. Also there's apparently people out there who both charge and ride the same scooter so they get some VC funded free transportation.
  • Cacti 7y ago
• mikeryan 7y ago
  Profitable minus CapEx on a capital intensive company seems like some creative accounting. They’re going to need a path to real growth or their next raise is going to be a down round.
  • trevyn 7y ago
    They include depreciation in the calculation, so it's not that bad.
    • Cacti 7y ago
      Not bad? It’s _worse_. They’re not depreciating servers here that they got use out of, they’re depreciating scooters that are broken, stolen, missing, or otherwise falling apart. Considering this is their fundamental business, it’s pretty bad.
  • kgwgk 7y ago
    Where does it say it’s “Profitable minus CapEx”?
    • mikeryan 7y ago
      Sorry “break even” The company is projecting solid growth in the summer months, when it expects to break even, excluding capital expenditures.
      • kgwgk 7y ago
        Thanks, I missed that. It seems difficult to go from a $100mn loss to breakeven so quickly if the cost-cutting measures are like reducing staff by 5% but it’s not clear where that $100mn loss was coming from (includes a “one-time” write off) and it’s not clear what do they mean by break even either.
  • Cacti 7y ago
    “We’d be making tons of money if we just didn’t spend so much.”
• seniorThrowaway 7y ago
  Bird also had horrible problems with fraud from chargers. I gave it a try and the number of high value birds that were locked up in people's houses and garages was astounding. Just blatant outright fraud, a house in the burbs would have 20 $20 scooters showing at the location. I think they finally have it under some control as high dollar scooters never show in the app anymore, that probably also means they have less people charging.
• mushufasa 7y ago
  How well does the library/blockbuster video subscription model work for bike+scooter shares? You offer the item for free or heavily subsidized, and make money off of late fees. In this case, rides are freeish but if you don't return it on time you pay an arm and leg? Someone has to have tried this, right?
  • jonlucc 7y ago
    This is how my city's docked bike system works, though with a small added monthly membership. The effect is that I have never once used it. The risk of the dock near my destination being full is too big for me to bother.
• lanrh1836 7y ago
  I think there’s a good chance they go under in less than a year, with the final nail on the coffin being the poor performance of Lyft and Uber stock since both represent the very best case scenario for Bird...
  • microdrum 7y ago
    The big question is when will the VCs take the write down on their quarterly pro forma financial statements!
• slovette 7y ago
  This whole model is such an obvious failure it’s shocking it ever got off the ground. Leaving the easy business reasons aside, I was in Denver and the amount of these scooters littered around the city pissed me off. They where everywhere. It’s just a matter of time before the city has enough and either bans them or just regulates them out of business viability. This is one of those things that had this business been forced to stand on its own 2 feet with early revenue survival and not been gifted life by investors it would have met its doom naturally without the waste of billions of dollars. It’s a great example of how the new “start-up” method of business building can be toxic and unproductive to the betterment of society. It allows bad ideas to have life because a few people wanted it to be so. Society would have killed this quickly.
  • goobynight 7y ago
    I'm a Denver local and like them a lot. So much that I bought my own premium model for $2500. Cars, even if they are in designated parking spaces, are even worse litter to me. They are everywhere and get a free pass. As for the waste, it's not like Bird is funded by people's personal retirement accounts. Nobody invested is getting a fast one pulled on them. The money didn't vanish. The VC goal is to take a massively scalable idea and see if it is possible to find profit in it. This is clearly scalable, so they're testing it out and seeing if they can find a formula. For better or worse, VCs are members of society.
    • barkingcat 7y ago
      The fact that you bought your own for $2500 means their business model is a failure. If you spent $2500 on Bird subscriptions and rides then that means that the business model is successful at least in your case. Your comments directly prove the previous poster's thesis. EDIT: And yes, Bird has realized the failure in their previous business model of renting scooters, and will be SELLING scooters directly (which in my opinion is a much better business model) https://shop.bird.co/pdp.html https://shop.bird.co/pdp.html Alas, "Delivering in US and Europe summer 2019" means that they have lost out on $2500 worth of business from goobynight (and from the market segment represented by goobynight).
• supernova87a 7y ago
  On a different note -- I refuse to take these scooters around any typical city. You are one pothole or crack in the road from being knocked on your ass under a passing bus. And given the state of our US city roads, this not just a remote possibility. The size of the wheels is just not safe at high speed + you being able to avoid situations like this. Don't even try it at night -- very dangerous. Ride a bike.
  • bllguo 7y ago
    i have the same safety concerns around bikes, having had a close shave before. the problem is the infrastructure
    • deathanatos 7y ago
      A bike's wheel has a considerably larger diameter than a typical scooter's. It should be able to handle cracks and potholes much better, since the ratio of pothole-depth to wheel size means it can essentially climb out of the hole, whereas to a scooter, it's like hitting a wall (that the higher center-of-gravity human is then going to be flung over). That's not to say there's aren't potholes large enough to take out bikes, just that there are a set of potholes that bikes can ignore and scooters cannot. Nor is the above point that bike's don't have danger associated with them. (Largely, idiots in cars.)
  • openthc 7y ago
    What about this big electric scooter? https://www.alibaba.com/product-detail/2018-Newest-Popular-Citycoco-Electric-Scooter_60842364812.html https://www.alibaba.com/product-detail/2018-Newest-Popular-C... rode one on demo a few weeks ago in Seattle -- super fun!
    • Washuu 7y ago
      Any scooter that has an actual suspension instead of fixed wheels will handle bumps for the most part instead of trying to throw the rider off.
  • 7y ago
• jklein11 7y ago
  How could it possibly cost $300 million dollars to create a scooter company?
  • xenospn 7y ago
    Salaries. Hundreds of engineers @200k per year is tens of millions of dollars PER YEAR. And that doesn't even include the scooters!
• ApolloFortyNine 7y ago
  Interesting timing, I just read about the Scooters Richmond, VA seized last year about to be sold at auction. [1] Obviously the $70k in scooters they're losing here won't break them, but scooters are now legal in Richmond, so one would assume Bird could just pay their fines and get them back now. My guess is they already wrote them off last year so they just don't care, but it's not a good look for them. [1] https://richmondbizsense.com/2019/07/11/flipping-birds-flock-impounded-scooters-headed-auction/ https://richmondbizsense.com/2019/07/11/flipping-birds-flock...
• microdrum 7y ago
  Oh my god. Please, investors, do not put more money in. It's enough already. Anyone who studied economics and looked at this from the beginning knew it was a poor idea not likely to succeed. The experiment is over!
• andrew_ 7y ago
  I'm looking forward to buying one on surplus when the market eventually bottoms for these services. Not being a cynic, it's simply inevitable.
• Kiro 7y ago
  Bird lost the race and expanded too late. In Europe Lime is dominating.
• nimbius 7y ago
  Finally, some sober response from the market. there is just no way these can make money at the rate they get destroyed. Im an auto mechanic by trade, and realized these things were a terrible idea when we started having to remove them from cars and trucks. Running over one of these things is somewhere between hitting a land mine and a bicycle rack. Ive personally had to cut at least 30 of them from various drive shafts, wheel wells, and suspension arms. I have a Mercedes van customer looking at nearly six thousand in damage to everything from the radiator all the way back to the driveshaft knuckle after hitting two of these at highway speed as they fell out of the back of a pickup truck. The real joke is they are looking to file an insurance claim against Bird, as their attorney believes state vehicle law covers the scooters as a motor vehicle similar to a motorcycle.
  • minhazm 7y ago
    I don't see how what you described has anything to do with Bird. It could be any scooter, or any random object that's falling out of a pick up truck. Running over things in general is going to be bad for your vehicle.
    • bobobooey 7y ago
      He may be seeing these coming in at a higher rate than other objects. Bird has set up a business of transporting heavy scooters that wasn't there before. I've seen people ride 4 at one time to transport them home to charge
    • e40 7y ago
      We don't know if the pickup was being operated by Bird or a subcontractor. My guess is that it was. I see people picking these things up in pickups and vans, and they don't look at all professional, but they look like they work for Bird (or the other companies in the sector).
    • save_ferris 7y ago
      It's relevant to Bird because Bird makes these scooters available to use at very low cost. Nobody would leave their own scooter in the street, but people have no problem leaving someone else's scooter wherever it was convenient. People leave them all over the place where I live, and it's been a huge problem. They're constantly being fished out of the rivers, dumpsters, etc.
• ballmers_peak 7y ago
  Hi everyone! Jay from The Information here. We are big fans of HN and have specifically unlocked this article for the HN community. Use this link to view the article in full. https://www.theinformation.com/articles/hit-by-big-loss-bird-seeks-300m-in-new-funds?pu=hackernews38uvpt&utm_source=hackernews&utm_medium=unlock&utm_content=bird-big-loss https://www.theinformation.com/articles/hit-by-big-loss-bird...
  • aj_icracked 7y ago
    Jay, this is awesome! I really appreciate this and it's super great to open this for the HN community. I love that approach to balancing paywall vs. critical mass / sharing. Thank you! PS. I'm an Information sub and love how deep you go in the reporting - keep it up, it's very refreshing.
    • simonebrunozzi 7y ago
      Seconded. Really appreciate this.
    • ballmers_peak 7y ago
      Love to hear it.
  • PenguinCoder 7y ago
    Thank you.
  • halotrope 7y ago
    Great!
  • deleted 7y ago
    [deleted]
  • 3327 7y ago
    We don’t like paywalls around here. In case you didn’t hear the word, the word is the bird
• jmpman 7y ago
  I live in a suburban area, and want a scooter in just two locations - one: next to the oil change/car repair and tire change places - where I’m going to be without a car for a number of hours. Two: close to the bars, so I can bar hop without the long walk or expense of an Uber... Bird does a good job with the second, but seems to neglect the auto service locations. They seem to park their scooters next to the bus stops, which, if this were San Francisco, might make sense, but here, only poor people ride the bus and they’re unlikely to pay for a scooter. Now, they could offer geofenced price reductions for rides originating around these bus stops and increase utilization, but their current pricing prevents the poor from using the service.
  • jm20 7y ago
    > riding electric scooters after a few pints is about as much thrill as I get these days You're literally advocating drunk driving. Whether or not you're driving a car or a scooter, this is dangerous, illegal, and you should never do it. You're endangering yourself and others.
    • secabeen 7y ago
      > You're literally advocating drunk driving. And just in case you didn't know, in California the penalties for driving a scooter drunk are exactly the same as a car. The law makes no distinction between driving a car, driving a scooter, or riding a bike. If you are in control of a vehicle and drunk, you are committing a DUI.
  • astura 7y ago
    In most jurisdictions its just as illegal to ride a scooter while drunk than it is to drive a car while drunk.
• apo 7y ago
  The path to profitability seems to flow through lowering costs - especially depreciation: > Bird’s largest cost per ride is depreciation, or the decline in value of its scooters. Depreciation, as calculated by the company, is a four-week trailing figure taking the total depreciation expense for that time and dividing it by the total number of rides, a person familiar with the matter said. Currently, that figure ranges from $0.94 to $1.17 per ride, or about a quarter of revenue for each ride, Bird says. ... These numbers appear to apply to Bird Zero and Bird One, not the older scooters which presumably have even higher depreciations. The article doesn't appear to break this down further, but it seems a big part of depreciation might be loss/theft/vandalism. That's unlikely to decline because better quality scooters are put into service. If anything, it seems the move to more robust (and expensive) platforms might make the scooters even more attractive to thieves.
• KibbutzDalia 7y ago
  Bird works very well here in Tel Aviv! I use them every day. However, I've never seem them work well in other places. I see more electric scooters in the bicycle lanes by the boardwalk than bicycles, by a factor of 2x or 3x. I'm not sure the Bird model will work everywhere, but in "beach towns" or college campuses, etc, it's a good model. It's probably overvalued, but the concept of a "ride share dockless scooter" isn't always bad in some places.
• Animats 7y ago
  "In this year’s first quarter, the electric scooter operator lost nearly $100 million while revenue shrank sharply to only about $15 million, people familiar with the matter said. In the spring, it told people it was down to about $100 million in cash, even after raising more than $700 million over a year and a half." This is a business? How, exactly, does it get better? The cost and revenue are pretty straightforward here. Just because Uber found a big enough sucker, the Saudi Arabia sovereign wealth fund, to keep them going, doesn't mean everybody can do it.
  • randyrand 7y ago
    SpaceX was incredibly unprofitable for years - as are most companies when they first start. I’m not saying you are wrong, I’m just saying that data you’ve cited is not very helpful.
    • xphilter 7y ago
      How can you compare SpaceX with Bird? One has a giant moat of billions in R&D and one would not expect it to be profitable until the actually Hard To Make product exists. The other is literally a board with wheels + a battery and small motor. To say Bird's market is easy to enter is a huge understatement. Worse--the companies themselves are just commodities that will be aggregated by Uber/Lyft. I already find myself just opening Uber to see whatever scooter is closer. I am--and I'll make a not so big jump here, other people too are--not loyal to one brand at all.
  • microtherion 7y ago
    VanderZanden posted a revenue plot that shows that the first quarter was indeed terrible, but that revenue rebounded very strongly in the second quarter: https://twitter.com/travisv/status/1149762561807548416 https://twitter.com/travisv/status/1149762561807548416 As he puts it: "It's def a seasonal business and we weren't diversified in the southern hemisphere last year. We will be this year." Startup founders tend to be notoriously optimistic, but this explanation sounded pretty plausible to me. The other tweets in this thread also to me are evidence that he has a pretty decent grasp of the economics of his business and has a plan to take it to profitability without relying on assumptions of e.g. self driving robots picking up scooters built from free titanium.
• nraynaud 7y ago
  Kill them and bring back the bikes!
• jmull 7y ago
  Exploring new business models seems like a good idea for them. I can't see how ubiquitous scooters is anything but a niche business. Selling scooters to those that want them does make sense as a business. But I doubt that helps Bird because that's still probably not a very big business. I'd think it would take something on the order of decades to make $300M selling scooters.
• monksy 7y ago
  I hope these leaches go out of business. They enable their users to use them in terrible ways.
• anbop 7y ago
  I hope the scooters don't vanish. I used to get home on the train, get in the car, drive to my son's daycare (no traffic in this direction), and spend 45 min in rush hour traffic driving him home. Now, I get to the train, take a scooter to his daycare in 10 min, and walk home (30min). If I walked both ways I'd get to his daycare too late. The scooter has unlocked a really awesome transport modality for me. I get that the business model is fucked but hopefully they can design a more robust piece of hardware and also figure out the charging problem, perhaps with swappable batteries.
• jason_JA 7y ago
  It's worth checking out the response from the Bird founder: https://twitter.com/travisv https://twitter.com/travisv The Information willfully printed misleading information here. https://twitter.com/travisv/status/1149763861731352577 https://twitter.com/travisv/status/1149763861731352577 I know of them doing this in a very messed up way at least once before. They've got a business to run, but they seem to have let their "exclusive", scoop driven brand excuse their crossing of clear, ethical lines.
  • makosharks 7y ago
    Thank you so much for making a brand new account just to shill for Bird. That said, the CEO's story doesn't conflict with the article at all. The only difference is that the CEO whines 'fake news' and hopes that people won't think critically about how he's spinning.
  • dmix 7y ago
    It amazes me they are only 1.5yrs old.
  • Cacti 7y ago
    That’s an awfully strong accusation for what amounts to them not originally listing the $100mil as depreciation. That is hardly the crossing of ethnically lines, and neither your accusation nor the CEOs clever spin changes the fact that they’re still hemorrhaging money due to fundamentally poor business decisions. What is your affiliation here, considering that you created this account an hour ago solely to post this inflammatory and misleading accusation?
• hartem_ 7y ago
  Response from Bird https://mobile.twitter.com/travisv/status/1149762439593861120 https://mobile.twitter.com/travisv/status/114976243959386112...
  • Cacti 7y ago
    Lot of noise for what amounts to a squabble over whether to call the $100 million a loss because of horrible business decisions or depreciation... because of horrible business decisions. I’m sure Bird will have equally good spin as to why, despite claiming this is such an egregious abuse of journalistic ethics, they won’t sue. “Priorities” or some such lazy excuse I’m sure.
• acd 7y ago
  Previous Fed chairman Ben Bernanke, decides to helicopter drop money through printing press at zero interest rate. Electric Scooters drops from the sky. Now what?
• nlh 7y ago
  I’m completely at a loss for understanding electric scooters in a city like San Francisco (reminder for those who aren’t familiar: wildly hilly!). I tried one of the scooters when they first hit the streets here and it promptly gave up the second I tried going up even a moderate hill. So I guess they’re great if you happen to need to go on a totally non-hilly route in one of the hilliest metro areas on earth? I am, btw, otherwise a massive alternative-transportation fan. The e-assist bikes (Uber/Jump in particular) are life-changing. Enough of an electric kick to keep you from breaking a sweat, but you’re still moving your body and getting some cardio (even if a small amount), and if you need to go over a hill (likely), you can put a bit of muscle into it and actually make it to the top.
  • randyrand 7y ago
    Mine can do hills decently, but it depends massively on your mass.
  • Psyonic 7y ago
    There's plenty of people who live in SOMA, Bayview, Dogpatch or the mission commuting to SOMA and FiDi who barely have hills at all. I used a single speed bike for years when I lived in SF. I'm not saying they're a great fit for everyone -- but there's definitely a market.
• Presidio001 7y ago
  Bird needs to get serious about docking stations - seeing them littered everywhere in San Diego was depressing. Think this through @bird
• AtlasBarfed 7y ago
  Low barrier to entry, and not particularly safe. Jalopnik preferred "minibikes". However, a great start for eliminating the auto as the primary city transportation.