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What Does Bird’s Revenue Snafu Mean for the Future of Micromobility?
Maylin Tu
Maylin Tu is a freelance writer who lives in L.A. She writes about scooters, bikes and micro-mobility. Find her hovering by the cheese at your next local tech mixer.
In the beginning, there was Bird.
When Travis VanderZanden and company dropped the first Xiaomi scooters on the streets of Santa Monica, a micromobility revolution was born. But five years later, the shared micromobility startup’s future is in question.
Last month, Bird announced it overstated revenues for the last 2.5 years and may not have enough cash to survive, setting off waves of speculation about the viability of the industry. According to an SEC filing, the discrepancy was the result of counting rides taken by customers with an insufficient wallet balance as revenue.
This means that riders bilked the company out of millions of dollars. In an investor call, CFO Ben Lu said that Bird planned to revise numbers for the first two quarters of this year by $12.5 million for a total revision of $31.6 million from 2020 to 2022.
It was the latest in a spate of bad news for the company that went public via SPAC in 2021. In just the past year, Bird has also pulled out of multiple cities, changed CEOs and risked being delisted on the New York Stock Exchange. The revenue snafu seems to have further deflated optimism in the company, and the timing — as the economy reels from inflation and effects of the pandemic slowdown — couldn’t be worse.
“I was very surprised that it's $12.5 million. It's a large number,” said Prabin Joel Jones, ex-CTO of Bond Mobility and founder of Freshkart, a Belgium-based meal delivery startup. “But I'm also surprised that there's not a lot of people talking about it.”
How Did Bird Veer Off Course?
Critics, competitors and Bird itself have blamed multiple factors for the state of e-scooter startups, including a strategy of expansion at all costs, bloated general and administrative expenses and over- and under-regulation by cities.
“[Burning cash to expand] is okay at the beginning, but it cannot be the game for a really long time, when you absolutely have to find the right business model for you to be profitable,” said Jones.
Bird has made significant cuts in recent months, laying off 23% of its staff, halting product lines and slowing down the purchase of new scooters.
“Last quarter was, from a net-loss perspective, one of their best quarters. But it's too late. They should've done this a year ago,” Jones added.
Bird, Spin and others blame cities for over-regulating e-scooters, enforcing riding and parking restrictions — like speed limits, curfews and parking corrals — that disproportionately affect shared bikes and scooters. At the same time, they say municipalities have been too lax, allowing markets to be oversaturated by operators, making it impossible to achieve profitability. Emil Nnani, founder and CEO of Dallas-based micromobility startup Boaz Bikes, said that’s not a fair assessment.
“They're using the excuse of saying, ‘Hey, well, [there are] too many operators.’ But what that really says is… ‘Hey, we want to operate a horrible business, and we want to make money on it.’”
Nnani also pointed out that Bird is one of the last to adopt swappable batteries, which would allow it to cut down on operating costs; depleted scooters would no longer need to be transported to a home or warehouse for charging. Instead, batteries could simply be swapped in the field.
“They definitely have to raise a massive amount of funding in the next, say, three months. If they don't, it's going to be very difficult for them,” said Jones.
An Unlikely Scooter Suitor
As Bird rethinks its future, Helbiz CEO Salvatore Palella has been teasing a possible acquisition, one bird meme at a time.
\u201cI\u2019m starving\u201d— Salvatore Palella (@Salvatore Palella) 1670347315
The New York-based company is the only other e-scooter startup to go public. It recently acquired West Hollywood-based Wheels.
“Part of our short term and long term strategy is acquisitions within the micromobility space,” Amy Shat, chief people officer at Helbiz, told dot.LA. “Will we consider all opportunities we have to do that? Absolutely.”
Bird spokesperson Campbell Millum wouldn’t comment directly on the possibility of a sale. “We don't comment on rumors,” she wrote by email.
But Helbiz has its own problems. The company is currently trading at $0.16 and risks being delisted on Nasdaq.
Canary In the Coal Mine or Just Growing Pains?
Despite these setbacks, some industry insiders and companies say they are still bullish on shared micromobility.
For one, cities may be rethinking the nature of public-private partnerships in the sector — moving past the “battle royale” pilot stage where a large number of young companies fought for dominance on city streets and into something more sustainable, where cities pick the best companies and award them with more lucrative contracts.
For example, Santa Monica will be recruiting two operators for a three- to five- year term starting next year. Currently, Spin, Veo and Wheels are the only three operators in the city — Bird was unceremoniously booted last summer.
The future of shared micromobility might be partially subsidized, especially if cities want to make micromobility an integrated part of their transportation networks and an equitable option for all.
In cities like L.A., e-scooter companies are required to operate in low-income areas that are less lucrative for them. But in the future, cities might start subsidizing these rides.
“Nobody in the history of cities has figured out a way to really make money providing transportation as a public good,” said Colin Murphy, director of research and consulting at the Shared-Use Mobility Center, in an email.
Murphy argues the government routinely subsidizes the auto industry by building and repairing roads and setting aside public space for private vehicles.
“The same thing will have to happen with shared bikes and scooters if they're going to remain a real part of the transportation ecosystem,” he said.
That said, Boaz Bikes’ Nnani predicts that 2023 and 2024 will be “golden years” for shared micromobility. As bigger companies like Bird are forced to pull back, he said, smaller companies like his will have the space to grow.
“And sometime in 2025, I expect fresh money to start getting pumped into the industry, once they see that, ‘Hey, okay, everybody's figured out the unit economics’,” he said.
From Your Site Articles
- Wheels Pulls Out of Culver City and West Hollywood ›
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- Bird Stock Tanks After Company Warns of Dwindling Cash Flow ›
- Why Cities Will Tailor Their Infrastructure To Micromobility - dot.LA ›
- E-Scooters Could Be The Future Of Micromobility In LA - dot.LA ›
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Maylin Tu
Maylin Tu is a freelance writer who lives in L.A. She writes about scooters, bikes and micro-mobility. Find her hovering by the cheese at your next local tech mixer.
LA Tech ‘Moves’: Mapp Gains New CPO and CTO, Prodoscore Taps Boeing Exec
05:00 AM | May 26, 2023
LA Tech ‘Moves’:
“Moves,” our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.
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Mapp, a digital marketing tools developer named Eric Lubow as chief product and technology officer. Lubow was most recently vice president of engineering at Thrasio, and previously was a founder and CTO at HealthHive, Mymee, and SimpleReach.
Former Sitecore chief marketing officer Paige O’Neill joined sales enablement platform Seismic as CMO.
Security and compliance automation platform Drata welcomed Matt Hillary as vice president security and chief information security officer (CISO) and Conor Nolen as chief customer officer. Hillary most recently served as SVP, systems and security and CISO at Lumio, while Nolen served as SVP of Customers for Life at Clari.
Cineverse, a streaming and entertainment company, promoted Erick Opeka to president of cineverse, Tony Huidor to chief operating Officer and chief technology officer and appointed Mark Torres as chief people officer. Opeka currently serves as the company’s CSO, Huidor previously served as SVP of product and technology, while Torres worked at companies such as Sony Pictures, Ticketmaster and Variety.
Employee visibility and productivity intelligence software Prodoscore hired veteran technologistRaghu Kopalle as vice president of product and engineering. Most recently, Kopalle served as Boeing’s product leader of airborne software systems.
Wiliot, an IoT platform tapped Antony Yousefian as vice president of climate and circularity. Yousefian held various executive positions at climate technology startups and impact investment funds.
EVgo, a fast charging network for electric vehicles (EVs) added Paul Segal and Jonathan Seelig to its board of directors. Prior to joining, Segal served as Chief Executive Officer of LS Power since 2011, while Seelig co-founded Ridge, a cloud computing platform and Akamai Technologies, Inc., a content delivery network, cybersecurity and cloud service company.
YOOM, a generative AI 3D technology company, appointed Nir David as head of gaming. Prior to this role, David was director of strategic partnerships at Playtika and led key relationships with major platforms such as Meta, Apple, Google, Windows and Amazon.
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Decerry Donato
Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
Upfront Ventures Summit: The Chainsmokers Journey From Music to Venture
02:16 PM | March 02, 2023
Clark Studio
On Thursday, Upfront Ventures hosted its 2023 Summit and music icons Alex Pall and Drew Taggart of The Chainsmokers hit the stage, not to perform, but instead to discuss their venture journey.
The duo launched MantisVC, a Marina Del Rey-based early stage tech venture fund in 2019.
Pall and Taggart shared the stage with WndrCo’s managing partner Jeffrey Katzenberg to dive deeper into what their music career has taught them and how it translated over to their venture firm.
Here are some of the most important takeaways:
The duo believes hustle is more important than talent to achieve success.
“There's just so much content out there that's just happening all the time for no reason,” Taggart said. “There's just so much to pay attention to and if you have to wake up every day, and think out what your angle is going to be, try stuff, have it not work. You have to accept defeat so frequently and still get up and do it.”
Creating music was their foray into building communities.
“I think we have some real insight into how to build that community and tell that story because essentially, that's all we're trying to do,” Pall said. “No matter what your business is, you're telling the story about something that you think is important that someone else needs and will enjoy.”
Building connections and having conversations with pioneers in the space helped them launch MantisVC.
“Humility and being self aware are two of our strengths,” Taggart said. “I think knowing what we don't know is a big part of how we've gotten to where we are, and with the support of people around us, and the relationships we built, we understood that we were going to have to go out and prove to the world that we were serious about this and we respected the people that have come before us and the people that are doing it right now.”
VCs should offer all their founders support.
“When you're building something early on, you want that support, that hands-on feeling and the purpose of Mantis isn't necessarily right now to replace the incredible institutional investors that exist out there and have been around for a while,” Pall continued.
“But we want to be the Robin to their Batman, and we think there's a way that we can kind of partner with everybody in the space and provide our founders that holistic support they need. It's inspiring to work alongside people that share that same energy and we're constantly working on ourselves and I feel like it takes a really special type of human being to be successful in this world. Level of grit and determination and something that's continually fueled us and we want to invest in people like that.”
Feedback is necessary and essential to create successful products and businesses.
“Similar to products or services that you're building, it's important to get real life feedback out there and iterate on those things,” Taggart said. “And there's really just no substitute for that.”
Pall added, “I think for some reason in our culture, it's become an issue for people just to be straightforward and say no, about things and give honest feedback and, and move on. I think we can all learn a lot from just having more honest conversations with each other.”
Never lose sight of your core audience and mission as a company.
“Never forget what your core product is and what people love about that and make sure that every piece of innovation is derivative of that,” Taggart said. “I see a lot of friends of ours that have had really successful companies start to build ancillary projects that don't really feed their core audience that they're just making to compete with their competition. We do the same thing in songwriting, and you can never lose sight of what people love about you.”
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Decerry Donato
Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
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