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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.
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- 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.
Column: Advice to CEOs on Their Upcoming Layoffs – From Someone Who Has Done it Before
06:27 AM | March 18, 2020
The second week of October in 2008 was one of the most painful and emotional times of my career. We ushered 50 Zillow employees into an off-site conference room. I was COO then, and we were about to lay them off -- one-quarter of our staff. The Great Recession had hit, and the management team was following our gut and also the advice of our investors at Benchmark Capital and TCV: cut early and cut deep. Extend the runway. Conserve cash. Survive. I knew we had to make a hard decision to ensure Zillow would continue to thrive.
It's a scenario CEOs around the world dread but one that is becoming more real as the economic toll from coronavirus spreads. Venture capital firms are again warning their companies to prepare for an extended recessionary period. Leadership teams at companies large and small across the globe are meeting to determine their next moves.
I've led companies through two major recessions. The first was Hotwire after 9/11 in 2001. The second was Zillow in 2008 after the Global Financial Crisis. No matter the cause of the recession, the fundamentals of preparing a business for an extended economic downturn are the same — as are the fundamentals of compassionately handling layoffs.
I expect many companies will lay off between 10-20% of their staff in the coming weeks or months. Some furloughs have already been announced, but the real layoffs are still coming. Companies have been on hiring binges for the past 10 years, and many companies can manage to lay off 10% of employees without a significant impact. But that doesn't mean these companies should lose sight of the very human toll reductions take, and handle layoffs sensitively and with care.
Here is some advice from someone who, unfortunately, has some battle scars on this topic:
- Reduce headcount once. There is tremendous damage in cutting headcount little by little -- the steady drip-drip of bad news demoralizes a company beyond saving. Get to your target employment count the first time so that you won't have to do it again. This was what we did at both Zillow and Hotwire. It helped our remaining employees feel secure in their jobs and build camaraderie moving forward. At Zillow, we even had some of the laid off employees return once we started hiring again.
- Treat those you're letting go as generously as your business can afford to. I don't just mean with severance, although that's important. But also important is the honesty and dignity with which you treat them. If you can, provide outplacement support, or at a minimum gather a list of the affected employees' Linkedin profiles and send them to your VC firms, asking them to circulate. I've also seen some companies do a good job of posting information about employees they have had to let go (with the employees' permission, of course).
- Extend the exercise periods on stock options for affected employees. This is possibly the most significant move you can make for those employees. Most standard stock option plans require an employee to exercise their options 30-90 days after leaving a job. But when the employee does that, they have to pay taxes right away. At Hotwire and Zillow, we extended the period to two years. The laid off employees will appreciate this immensely; but also be sure to tell the remaining employees that you made this concession, as it will win them over too.
- Have the "are you in or are you out" conversation, ideally before final layoff decisions have been made. The last thing you want is to lose people who want to be there, and keep people who don't. So while making preparations for layoffs, or immediately after, it makes sense to give people the ability to choose to be laid off. They can get severance, and there is less stigma if they leave during a round of layoffs. At both Zillow and Hotwire, some people opted into the layoffs.
- Once the layoffs have been announced, use that first all-hands meeting to lock arms with the remaining employees. Acknowledge how hard and uncertain this time is, and that it's terrible to say goodbye to friends and colleagues. But tell them the truth: That the difficult decision has been made and now together, you will all do the best work of their careers during this period. That someday you will all look back on this as a defining moment in your careers. That eventually this, too, will pass.
Downturns are not all bad news. Great companies can be built during these times, too. Both Zillow and Hotwire thrived due to some of the shifts that happened during and after the last recessions. That's because during periods of great disruption, patterns and behaviors change, allowing disruptors and new entrants to thrive -- and new categories to emerge. This unprecedented time in our history will shift business momentum in different directions. It's hard, uncertain and scary, but there is enormous opportunity.
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Spencer Rascoff
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
https://twitter.com/spencerrascoff
https://www.linkedin.com/in/spencerrascoff/
admin@dot.la
Here's How To Get a Digital License Plate In California
03:49 PM | October 14, 2022
Photo by Clayton Cardinalli on Unsplash
Thanks to a new bill passed on October 5, California drivers now have the choice to chuck their traditional metal license plates and replace them with digital ones.
The plates are referred to as “Rplate” and were developed by Sacramento-based Reviver. A news release on Reviver’s website that accompanied the bill’s passage states that there are “two device options enabling vehicle owners to connect their vehicle with a suite of services including in-app registration renewal, visual personalization, vehicle location services and security features such as easily reporting a vehicle as stolen.”
Reviver Auto Current and Future CapabilitiesFrom Youtube
There are wired (connected to and powered by a vehicle’s electrical system) and battery-powered options, and drivers can choose to pay for their plates monthly or annually. Four-year agreements for battery-powered plates begin at $19.95 a month or $215.40 yearly. Commercial vehicles will pay $275.40 each year for wired plates. A two-year agreement for wired plates costs $24.95 per month. Drivers can choose to install their plates, but on its website, Reviver offers professional installation for $150.
A pilot digital plate program was launched in 2018, and according to the Los Angeles Times, there were 175,000 participants. The new bill ensures all 27 million California drivers can elect to get a digital plate of their own.
California is the third state after Arizona and Michigan to offer digital plates to all drivers, while Texas currently only provides the digital option for commercial vehicles. In July 2022, Deseret News reported that Colorado might also offer the option. They have several advantages over the classic metal plates as well—as the L.A. Times notes, digital plates will streamline registration renewals and reduce time spent at the DMV. They also have light and dark modes, according to Reviver’s website. Thanks to an accompanying app, they act as additional vehicle security, alerting drivers to unexpected vehicle movements and providing a method to report stolen vehicles.
As part of the new digital plate program, Reviver touts its products’ connectivity, stating that in addition to Bluetooth capabilities, digital plates have “national 5G network connectivity and stability.” But don’t worry—the same plates purportedly protect owner privacy with cloud support and encrypted software updates.
5 Reasons to avoid the digital license plate | Ride TechFrom Youtube
After the Rplate pilot program was announced four years ago, some raised questions about just how good an idea digital plates might be. Reviver and others who support switching to digital emphasize personalization, efficient DMV operations and connectivity. However, a 2018 post published by Sophos’s Naked Security blog pointed out that “the plates could be as susceptible to hacking as other wireless and IoT technologies,” noting that everyday “objects – things like kettles, TVs, and baby monitors – are getting connected to the internet with elementary security flaws still in place.”
To that end, a May 2018 syndicated New York Times news service article about digital plates quoted the Electronic Frontier Foundation (EFF), which warned that such a device could be a “‘honeypot of data,’ recording the drivers’ trips to the grocery store, or to a protest, or to an abortion clinic.”
For now, Rplates are another option in addition to old-fashioned metal, and many are likely to opt out due to cost alone. If you decide to go the digital route, however, it helps if you know what you could be getting yourself into.
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Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
steve@dot.la
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