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Hit by Big Loss, Bird Seeks $300M in New Funds (theinformation.com)
159 points by prostoalex 11 months ago | hide | past | favorite | 266 comments

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.


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.

Love to hear it.

Seconded. Really appreciate this.


Thank you.

We don’t like paywalls around here. In case you didn’t hear the word, the word is the bird

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.

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.

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.

Bird isn't responsible for securing the load on a truck. They need to go after the driver of the truck that dropped them - he has liability insurance, or his employer does.

My experience suggests that Bird won't tell the victim the identity of the guilty party even if they know it. Here's a video of a Bird scooter rider running a red light and almost causing a collision with me, a cyclist:


I contacted Bird and while they did look at the video and seemed sympathetic, I got the impression that nothing was done in response. That's because they refused to tell me even simple things like "The rider was reprimanded". I didn't ask for the rider's identity, just for what was done in response. And I contacted them within an hour of the incident, providing precise time, location, and the video above, so I'm very confident they knew who the rider was.

(Sorry for the strong language in the video. Note that I included some time before the incident because I know from experience that some people always seem to suggest that if a cyclist had a bad time on the road it was because they antagonized who gave them a bad time. I hope it's clear that I had no contact with this guy before the video.)

To be fair, this kind of idiocy is in no way limited to scooters. In NYC we don't have Bird yet but we do have tons of delivery people on bikes (electric and traditional) that do stuff even more dangerous than this. One time while I was coming off of a steep downhill a delivery guy wheeled his bike out from between two parked cars without looking either way, and another delivery guy who was about 30 feet in front of me hit the bike, went over the handlebars, and smashed his face on the ground. He was visibly dazed for minutes after and bleeding from his head; it would have happened to me if I was about a second ahead of where I was. I've also had electric bikes whiz by about 2 feet from me on the sidewalk at 20+mph many times. They are nearly silent, so it's easy to imagine abruptly turning around or shifting over (as pedestrians are wont to do) and very getting severely injured. I've seen plenty of other awful and dangerous behavior in addition.

Fortunately, I don't see this as much with non-delivery cyclists. In NYC at least, this is mostly a problem with delivery people; the extreme pressure they are under to deliver on time, combined with the fact that many of them have clearly received no safety training, seems to be a major cause.

NYC's bad cyclists (and, in the future, bad scooterists) are actually scarier to me than NYC drivers because they can come at you from so many more angles thanks to their small size; it's much easier to predict and avoid cars and even pedestrians. (People are also used to cyclists here, so the cars are paradoxically not nearly as scary to me as they are in less dense environments.)

[edited to clarify that I was also on a bike]

Yes, I agree that delivery folks can be particularly dangerous. I also watch out for ridershare drivers as they are frequently distracted by their phone and in a rush.

The small size was a major problem here. I probably would have seen the scooter rider earlier if they were a driver running the red light. I now always check for red light runners at that intersection.

(As for how visible I was, I was wearing a hi-viz jacket at the time. My air horn seems to have been the only thing that caught the scooter guy's attention. Not sure what more I could do.)

For those that don't want to watch the video:

1. Bird rider runs a red light. 2. Bird rider has head phones on. 3. Bird rider doesn't bother to look at oncoming traffic before crossing.

It's clear to me from this thread, that scooter riders need insurance and a driver's license. That would solve 90% of the issues right there.

Motorized scooter riders in CA are required to have a drivers license and wear a helmet. Most states do not require insurance for motorized scooters that cannot go more than 25MPH.

of course they wouldn’t, voluntarily. and you shouldn’t want them to. under subpoena however, they would have to.

Yes, I thought about that after posting. I don't think they should give the identity of a user to some random person. For what it's worth, I didn't ask for the Bird rider's identity, and I don't see a good reason why they couldn't have told me whether the rider was reprimanded. I suspect that the rider wasn't reprimanded and they didn't want to lie to me.

Bird most likey is the "employer." They have a gig economy model where people are paid a rate per scooter to pick them up, charge them and drop them off at a specific location.

Its doubtful the truck driver was an employee of bird, but its also likely they were only moving the scooters because of this model. That sounds like enough of a reason to add them to the suit that will also likely hit the driver.

Yes—if Bird’s business model requires the transportation of the vehicles by contractors, Bird is responsible for requiring parameters of safe transport.

In such a case, I would agree. I was thinking "some random vehicle (perhaps a scooter thief) had a Bird scooter fall off."

It's a fair point, but I personally have been the victim of a piece of scrap metal that flew off a truck and into my windshield.

The issue is not precisely with Bird, but that the big dogs who fund these companies can produce giant pieces of wasted material thanks to how US and Chinese monetary policy works

Eh, I don't agree with this. The issue in your case was that someone didn't properly secure a piece of scrap metal to their vehicle. The fact that China demands scrap metal doesn't seem relevant to me given that this sounds like simple incompetence.

You wouldn't blame the automaker for a drinking and driving incident that resulted in a death, you'd blame the driver.

Curious why China is named

There's a lot of cheap money floating around in China as well. This is funding business models like that of Ninebot, who is the manufacturer for a lot of these cheap scooters. Another Chinese company that had a similar business model is Ofo, which essentially went bankrupt a few months ago after raising over $2B in funding for dockless bikesharing.

It's relevant to Bird because Bird has money, unlike Random Joe's Trucking Ltd.

Imagine running over a piano that fell off a truck, and then suing Steiner instead of the moving company.

If the driver of the truck was only transporting the bird as part of their agreement with Bird to charge the scooters, were they acting as an agent of bird at the time they were driving on the highway?

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

Scooters, including by Bird, have dramatically increased the amount of street obstacles one can run over. It’s absolutely relevant because the entire scooter model is “blanket the city with them”

On top of that, because many of the chargers are “contractors”, you get situations like the OP described where random people just throw scooters in their pickup, unsecured, and then they fly away on the highway.

Is it that hard to see? Bird, at a minimum, is going to have to replace the destroyed scooter, at least if they want to maintain the same capacity to serve that area/market.

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).

Just as I suspected, in a game of rock-paper-scissors, scooters beat cars.

I'm not saying Bird isn't responsible for some damage, but if the scooters fell out of a pickup, I can't see how anyone but the pickup driver is liable in this case. Or do you mean that the pickup was a Bird maintenance vehicle?

Typically Bird hunters [1] will go around with a pickup truck to gather a bunch of scooters to charge them. I've seen one pickup truck that appeared to be company owned rather than a bird hunter, but it seemed to have a decent system to secure the scooters and had many more than I'd ever seen a hunter get.

In any case, yes, drivers are responsible for securing loads, but in a lawsuit you go after the deepest pockets if you think you might be able to get payment. It would be an interesting argument that Bird is liable as the hunter is at least an independent contractor for Bird while picking up & transporting the scooters for charging.

[1]: Apparently this is the term for those who pull the scooters in and charge them and then redeploy them after the fact for a kickback from Bird.

Yeah, if this was someone getting paid by Bird in any capacity, then I can see them being liable. I was imagining a user tossing a couple of nearby scooters in their truck so they'd have them at their destination.

If you introduce a new technology that creates all sorts of negative side effects, why are you not to blame?

Bring a whole load of scooters into public spaces without ensuring they are properly stored, and professionally collected, is irresponsible and should be illegal. The pavement and roads belong to people, not to corporations.

Again, I'm not saying Bird is blameless in general. I'm saying that if a Bird user (not a contractor) chooses to put a Bird scooter in the back of their pickup, and doesn't secure it properly, that specific thing is not Bird's fault.

If a company leaves out a bunch of guns on the sidewalk and someone picks one up and shoots someone, is the company liable? The logic is analogous.

The pavement and roads belong to cars.

It's a joke to say anything else. If a scooter can get hit by a car and mess up the car, we've gotta do something about this nuissance! If a scooter takes up 2 sq ft of space on a curb in between rides, they're ruining our streets! Capitalism run amok! But the entire row of cars parked for free a couple feet away? That's great. Not to mention, tens of thousands of lives lost every year? All good, nothing wrong with that.

It's also got absolutely nothing to do with people vs corporations, using that dichotomy here is absurd. Car makers spend hundreds of millions of dollars a year advertising to people to get them to buy more, bigger, more expensive cars. Not to mention, cars are even often leased or rented. I don't see why the business model of rental vs one-time purchase matters, but even if it does matter to you for some reason, cars and scooters are both rented!

The way I see it, it’s about where the liability risk is placed and how that changes behavior. Because chargers use personal vehicles, Bird can turn their eyes to those people being unsafe. If Bird had its own employees charging them and using Bird company vehicles, the Bird corporate insurance rates would be at risk of increasing with reckless behavior. So they would probably take some time to police their drivers behavior.

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.

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.

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.


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)


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).

Me dropping cash on a scooter was just an interesting aside. I'm one of two people in town I've seen on a personal e-scooter.

Most people don't want to own. It's less useful for bar hopping and you're on the hook for maintenance/repairs/charging/storage. I'm more handy than the average person that rides these. The average person living in downtown Denver likely doesn't even own a set of tools.

A rental business is much more attractive to VCs, if they can make it profitable. Has a niche retailer has ever received VC attention? Honest question. That doesn't feel like it scales like nearly on demand rentals.

  less useful for bar hopping and you're on the hook
People using motorized scooters for bar hopping (inebriated use) is a specific concern.

Agreed, but insert an equivalent hop without alcohol and you'll see what I mean.

> The fact that you bought your own for $2500 means their business model is a failure.

Rubbish: they can be successful because not everyone wants to buy a scooter. Also commenter still probably uses Bird, for example one way trips or when it is just more convenient.

Both of these are true. I can't believe anyone thinks that my hobbyist purchase affects the transportation business model of Bird. That's like thinking cars are putting buses out of business in Chicago.

I've also rented a couple Lyft scooters out of convenience, as you said. They certainly feel worse, now that I'm spoiled, but the convenience of just dropping them off is a huge win.

Yep. My use case for scooters is when the bus will take too long to get me to/from work, or running errands, or when I'm too tired/it's too far to walk. I decide that I need it at the spur of the moment, and don't want to plan to have it with me.

  running errands
... is exactly the kind of use case for which these shared scooters are ill-suited.

You stop for your first errand, come back outside afterward, and bam! someone else took it. What if there are no others nearby?

Mm, good point. My use case is usually that I'll walk up to 40 minutes 1 way if I need a cable or something like that (non perishable, semi urgent) etc, but am not willing to walk 40 minutes each way. I end up ubering otherwise.

+1 yeah, I don't get that argument either. does the fact that someone bought a car mean the car rental business model is a failure? does the fact that someone bought a house mean AirBnB's business model is a failure?

One can buy a scooter at home, and then still rent scooters when traveling to other cities.

In Denver as well and agree completely. There are too many cars as is. I've never been more than two blocks away from one of these scooters, and they're fun to ride. I don't use them often as I have a bicycle. The general concensus among my peers is favorable or neutral on scooters.

Funny enough, because in Austin it's the absolute polar opposite. Sentiment there seems to be to fear and litigation. Even worse in Nashville. Southern, car-dependent cities prioritize the private car-owning driver above all other forms of life.

Overall sentiment among my peer group in Austin is neutral to somewhat positive. My biggest complaint is also probably their biggest asset: they're wildly popular amongst people who would otherwise take a car (basically, non-cyclists) - so there's a lack of understanding around how to operate in this middle ground between being a pedestrian and being the operator of a 2 ton motor vehicle.

What's this based on? It's funny to me that you draw a "Southern" line when Denver and most of the west is as car dependent as Austin. I agree with my sibling's (twalla) comment, by the way.

lots of VC money does, in fact, come from retirement funds (e.g. Calpers, the CA pension fund) and from university endowments.

No way is it the bulk of the funding and I bet VCs do well on the aggregate, which is why they are using their services. These institutions would all abandon ship.

Until the CA pension goes bust due to VCs, I'm still OK with what they do.

I was in Denver and the amount of these scooters littered around the city pissed me off. They where everywhere.

This is subjective. I live in a city that has at least five brands of scooters, and I work downtown where they are most densely clustered. (Not only that, it's a popular area with tourists, so it's an eternal September of scooter use.)

Some people here feel exactly the way you do; others think they're great. Some people consider them a nuisance to pedestrians; I walk on the same sidewalks and rarely experience a need to step around or over them. Some people feel terrified and menaced by them; I use the same streets and sidewalks, and for me, scooters barely register next to the danger posed by cars. Some people think they take up an inordinate amount of space; I think you could fit all the scooters in the entire downtown area into half a block's worth of street parking. You think they're toxic and don't improve society; I think they decrease the number of car trips and (in combination with Lyft/Uber) make it affordable for a lot of young people without tech jobs to live in expensive cities by making car ownership less necessary.

How do wheelchair and pram users feel about it? Elderly people navigating the sidewalk?

On the margins of downtown, where the sidewalks are narrow enough, I've seen the sidewalk blocked by a fallen scooter, because pedestrians are only allotted a tiny strip of concrete between the roads and the parking lots. But you don't see people with physical disabilities trying to navigate those neighborhoods on the sidewalk anyway. Want to make those areas more accessible? Reclaim some space from cars. Provide an array of attractive alternatives that induce more people to get around without driving, and then you can have reasonably sized sidewalks.

Downtown, where pedestrians are more than an afterthought, I see people with physical disabilities using the sidewalks every day. (There's a homeless shelter not far away.) I don't see them having problems with scooters. There's plenty of space.

Honestly, I don't see many fallen scooters at all downtown. Considering how easily they fall over from being jostled (which should improve in future models) I suspect a lot of people care enough to take a second to put a fallen scooter upright. When you think about all the ways people can be shitty with scooters, you have to factor in that people can be pretty nice, too.

Of course people aren't always considerate. In my own neighborhood, sometimes people block the sidewalk with their cars when they don't pull forward far enough forward in their driveways, forcing people in wheelchairs to go into the street. That hasn't caused the world to end, and neither will scooters.

Do cars in that city often drive on a sidewalk, like scooters?

Not often, but when they do drive onto the sidewalk and kill someone, you can count on the police department to say things like, drivers should "stick around and deal with the minor consequences," and pedestrians should "get your face out of your phone" because "you need to pay attention to what you’re doing, cause it can cost your life."


Denver local here, similar to sibling commenters. I definitely hear you about the scooters littered around. They're constantly left in the middle of sidewalks, randomly on the Cherry Creek trail (I ride that to/from work so I see it a lot), in people's lawns, etc. I realize this isn't the company's fault per se, but rather because some of the people riding them are inconsiderate jackasses. Still, it is super annoying.

That said, on balance I'd rather have some annoying scooters rather than a whole crapload more cars, streets, parking, etc. And I'm hopeful that over time the culture around scooter usage will improve - particularly since the early users seem to be skew towards drunken barhoppers.

Of course what I really wish is that people would just sack up and ride bikes. Even better for the environment, better for your health, etc. But it's pretty clear that many people will never sign on for that, so something between that and a full-on car is welcome IMHO.

Taking an idea from cycling advocates, I encourage people to ask, when they encounter reckless or inconsiderate scooter use, "Do I want this jackass in a car instead, being just as inconsiderate or reckless?"

It's tough because people take cars for granted. They aren't ordinarily conscious of how big and dangerous cars are and how far we go out of our way to accommodate them, so it's hard to sell them on the value of mitigating that cost.

People said the same thing about both horses and cars around cities.

If we can replace some of the cars with scooters it should be a net gain for citizens.

It's worth checking out the response from the Bird founder:


The Information willfully printed misleading information here.


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.

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?

It amazes me they are only 1.5yrs old.

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.

Once I heard a story of an acquaintance that busted an arm and lost his front teeth after finding a pothole on his personal electric scooter, I have avoided them entirely. Liability seems to be the big hidden risk here from my POV.

I tend to agree - they'd work better on smooth, wide, grade-separated pavement. In other words, bike lanes.

i have the same safety concerns around bikes, having had a close shave before. the problem is the infrastructure

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.)

What about this big electric scooter? https://www.alibaba.com/product-detail/2018-Newest-Popular-C... rode one on demo a few weeks ago in Seattle -- super fun!

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.

The newer scooters have relieved this problem a bit. Something about the construction of the wheels in combination with small shocks makes small cracks much less problematic.

You definitely need to be an active rider to ride these safely.

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.

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/), I've put the deposit down on the Boosted Scooter (https://boostedboards.com/vehicles/scooters/boosted-rev).

This boosted scooter looks pretty good! hope the product is as good as their promo materials.

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.

I live in West LA and don't really have trouble finding some sort of scooter, but it's not always Bird. I just juggle about 5 different apps.

The introduction of this level of transport was enough to ditch the car and mix bus/bike/scooter full time.

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.

A few of the municipalities in LA have actively banned or reduced the amount they are allowed to operate. I haven't experienced it myself but I'm told they will shut down if you try to take them through Beverly Hills. Its too bad because I like them a lot.

a 30 foot walk is too far?

I read "10 minutes"

"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.

VanderZanden posted a revenue plot that shows that the first quarter was indeed terrible, but that revenue rebounded very strongly in the second quarter:


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.

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.

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.

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.

>There is no way where Bird becomes a viable business that grows into its absurd valuation.

I was recently chided and reproached by the HN mods for knocking scooter companies (even got the old “this isn’t personal, but don’t...”).

the point is with any SV funded company you don’t need revenue or even to be a viable business. You just need SV money (I think Bird has already burned through $415M and now asking for this $300M) to launch the business and “grow” the user base and/or metrics(someone here once fittingly described the model as selling $5 bills for $1).

So now you raise $500M sell $5 bills for $1, the startup staggers their sales so they show constant growth month over month, in reality you raise additional rounds to get more VCs to buy in and help market the company, then finally when you show tremendous growth (metrics), show revenue of $100M, then you file for a IPO and explain away the losses of $400M by saying at any point you can “flip the switch” and cut costs by no longer reinvesting in growth but make profits. Then at IPO you cash out and dump the shit company that’s never made a dollar on the public because all they see is the media pushed by SV/VCs with the media contacts, the big SV investor names, 100% growth month over month metrics, and the hope they to will get rich.

> I was recently chided and reproached by the HN mods for knocking scooter companies

On the contrary, I chided you for posting in the flamewar style (https://news.ycombinator.com/item?id=20347016), which we don't want on HN and which the site guidelines ask you not to do. We don't care about scooter companies, we care about the signal/noise ratio of HN threads.

Dang, you're a treasure.

Well not to rock the boat or beat a dead horse here, but it would appear my down voting/flagging privileges have been removed since this post, could they be reinstated?

None of your privileges has been removed, either before the post or after. What did you see that made you think that?

This is a very cynical perspective. The public markets are generally very unforgiving. This is why so many tech companies are choosing to stay private longer. If it was all about duping the public, they would IPO asap before the ship sinks.

Sure, there are examples like Blue Apron that seem to fit your narrative, but they are the exception.

If your narrative was correct, hedge funds or other intelligent investors would quickly catch on and short funds that purely track tech IPO's and make a killing. Obviously playing the markets is not this easy.

>The public markets are generally very unforgiving. This is why so many tech companies are choosing to stay private longer.

Can you even explain what that means?

In my estimation the companies are staying private longer so the VCs can blow up the valuations pre IPO higher than anytime in history, whereas, if the startup IPO’d from the start there is no way to continue the growth while sustaining the loss (in the real world business have to make a profit to continue) and VCs couldn’t make the same profit they do now, but in all other respects the risk would be the same.

Anyway it wouldn’t be to hard to look at the IPO of VC backed tech startups and determine what % had profits vs operating losses (obviously my guess is the majority are IPOing at losses). Then, a further analysis could be done to see if the average startup company valuations/market caps declined post IPO and how much pre IPO investors/shareholders took off the table.

Edit: looks like since 2010 there have been 100+ tech unicorns ($1B+ valuation) and ~2/3 didn’t make profit. Wish I could readily calculate how much VCs made taking those companies public, maybe someone can link an article/data.

"In this year’s first quarter, the electric scooter operator lost nearly $100 million while revenue shrank sharply to only about $15 million"

Bird seems to fit the cynicism just as well as Blue Apron. I'm unclear how the above ever turns into anything viable.

Sure, many of them are intelligent, and factor in the risk they're duped. Nevertheless, they are all looking for a good investment, and "growth" seems like a good metrics. From an investor's perspective, if you pass on a company like Bird, they will find another investor, and if they succeed, this will be a lost opportunity for you.

The only thing special about Bird is the quality VCs that got into it at seed and series a. Investors will be taking a second look at these funds. If second and third tier VCs had been Bird's primary backers, we would all care a lot less about this failed company.

All you've described is costs, not why costs must necessarily be higher than revenue. Every business has costs, many businesses have seasonality, and every VC blitzscaling business operates at a loss in order to capture market share. It's the playbook.

Here's a counterpoint why it might be a viable business: it unlocks a new market. Scooters enable a new class of trips: trips between 0.5 and 2 miles. There's currently not a lot of trips happening in that distance... below that you can walk, above that you take transit, but that coffee shop 1 mile and change away is just enough of a pain in the ass that it's not worth going there. Unless there was something that made it easy to go that distance.

Scooters are a new modality of transport that opens up an entirely new class of trips. Combined with the fact that the population is broadly trending towards dense urban environments, you have a whole new market you've unlocked.

Scooters aren't about replacing Lyft rides -- no one uses a scooter for a full hour -- scooters are about servicing trips that are too short for an lyft.

If there were a scooter every single time I wanted to use a scooter, then it would make sense. But that's not reality. The reality is that trying to get a scooter is haphazard at best.

You need to walk around and find one. And during rush hour, it won't be at the Caltrain station because they're already taken and distributed around the city.

It's clear as day that there's no way this is going to work at scale in order to justify a multi-billion dollar business.

Wait, so in a thread about a company raising more money for the VC blitzscaling playbook, you're complaining that popular demand for this service appears to be outstripping supply?

Lyft and Uber have shown that you can improve matching logistics by bolting on games like demand charges and utilizing various supply-side nudges to direct assets to where you need them to be. These are solvable problems. It seems like you're saying you would happily use the service if there was more of it available.

No that's not what I said. I said the only way it unlocks a new market is if there is guaranteed availability, which is functionally impossible. It doesn't take much effort to show that if the scooters start from an area that is very useful, then end up in random locations around the city, and once they are in an unuseful location, they stop getting revenue. And even worse there's the additional cost of getting them charged and then picked up overnight and redistributed by hand.

You need to flood the market with scooters so that people get scooters when they want it but cities won't allow it. Plus, it's cost prohibitive. Creating a new market is NOT a solvable problem, especially at the scale of funding that they have received. You can't throw a billion dollars and expect that a new market will create itself. That's why Bird is going to die, probably by the end of 2020.

If only scooters could drive themselves to your doorstep... Hey wait a second, that could be it! I'll start my self-driving scooter company today.

Random billionaire looking to invest here. Email?

> It seems like you're saying you would happily use the service if there was more of it available.

Which is a problem when the scooter companies lose money on every single scooter they put into the world.

Being popular alone is enough to grift SV investors who have money to burn, but when that well dries out they can't afford to subsidize these things to the extent required to keep them useful to people. If you can't find scooters they lose their utility, but the companies won't be able to afford leaving so much excess capacity around.

Where I live, this is not much of a problem. The only time I have trouble getting a scooter if I want it is during some large conventions and after large sports events. It would not take that much effort to plan appropriately for those events and make many more scooters available.

Also, the scooters have widened my options for lunch from maybe 3 choices within walking distance to something like 50. Sure it's a luxury, but for a few extra dollars, it is nice to be able to get a pita or burger instead of always a burrito.

That new market you are talking about was opened centuries ago by a cool little thing called the bicycle.

Although, then you have to exert your own energy, which many people find untenable.

Exactly how much do you expect someone to spend on a scooter daily? People can just buy their own scooter if Bird is forced to pay for all the real costs the Parent post described.

Ownership comes with significant inconveniences like having to transport and lock it up outside wherever you're going. A major convenience of Bird / Lime / etc is being able to just grab one at any location and then just leave it wherever when you're done, and not have to worry about these things.

A major convenience of ownership is that, most of the time, a working vehicle will be available when you need it.

To get that with a bike share program, bike share companies likely need to accept that their bikes get used less than once a day, on average. That means that users must pay for more than one bicycle. That, in turn, would make ownership cheaper than bikeshare programs.

Yea that's true. Bird will always have the casual rider base that wants the convenience. I think the real money is in capturing the daily commuter, however.

It would be interesting to see Bird have an offering to address the daily commute, something to the effect of Lyft Line. I'd be curious to see an Uber's Ride Pass [1] for scooters.

Where I live the scooters are mostly in very concentrated areas that few people would use them for commuting, either because they live in the suburbs (so far away it'd be impractical) or downtown (so close that you could walk nearly as fast as a scooter ride after accounting for sitting in rush hour traffic).

[1]: https://www.uber.com/newsroom/ride-pass/

My scooter will never be where I need it. The bird (or lime or Voi or...) can be picked up where I need it, and left where I don’t.

Much like a car or bike as you go from A > B > C > ... the scooter you own is where you are and thus where you want it to be.

And just like car rentals for regular users ownership is much cheaper. Tourism or some other niche maker surely exists, but the overhead assuming they need to break even is huge.

No, the scooter I own would stay at home, as it would be in the way during my morning commute.

(I’m not saying it’s for all, but for me, the shared scooter could not be replaced by having my own, which is the argument that kicked of this subthread)

It’s a hassle, but is it a ~10$ hassle because for most people the unsubsidized price is not going to seem reasonable.

Bike shares have comparable utility with vastly lower costs, and often can’t break even.

You pick up a scooter when you haven't brought other means of transportation. That's way more common than you seem to imagine (every day for me).

> The bird (or lime or Voi or...) can be picked up where I need it

It sounds like the problem is that it's never where you need it. Unless you had 10x as many scooters as people and they were littered literally everywhere.

Or you lazy asses could just walk. If you people reinvested all the time you spend justifying stupid businesses that are only kept afloat by 0% money that is running out, you'd all be better off

Is it bad for business to walk to a fundraiser meeting asking for money to build a scooter business because scooting is the future? Asking for a friend?

In several large cities there is already a workable solution for those trips though. Bike share with fixed stations, like CitiBike in NYC or Capital Bikeshare in DC.

As I understand it the fixed bikeshare costs are controllable and those systems are not losing money at anywhere near the rate of Bird.

EBikes will be rolling out soon for some of these systems too so that solves another one of the disadvantages they have against eScooters.

The electric bikes are great but having a small number of relatively far apart docking stations is a big inconvenience compared to dockless with scooters. Particularly so when you find a station empty of bikes when you need one or completely full when you need to drop one off. I use scooters way more than bikes personally even though the bike program has been in my city years longer. Convenience is everything for a 5-15 minute trip.

The problem with bikes is that you get incredibly sweaty even in the winter. I'm sure there's solutions to that as well but I would prefer not to have to towel down or change clothes after arriving at my destination.

This problem is fixed by eBikes. Jump on a JUMP bike in San Francisco and you'll find that there's little to no physical exertion.

Maybe it's just because I bike a lot, but during the winter, I don't get sweaty at all. I used to be able to bike 95% of the way to work (2.5mi) in jeans without getting sweaty until late June or July. (Those last two blocks going uphill would usually get me, sadly.)

And this is in Austin. Yeah, right now I'll get sweaty, because we hit 107f heat index every other day. During the winter I can bike ten+ miles in jeans and a t-shirt without getting sweaty.

And in the marketplace of ideas, why must there be only one workable solution?

An electric scooter is a fraction of the cost of an ebike, so you can have more of them, creating a denser transport network. Not as durable, sure, but why not let the investors deal with that risk?

And as much as I'd love the US be like the Dutch and have personal bikes go everywhere, I don't bike to the coffeeshop a mile away because the only bikes I see locked up outside in my city are missing, lets say, critical pieces. Bikeshare and scootershare offload the risk of personal property theft.

Lease a bike, and offload all repairs to the leasing company (https://swapfiets.de/en/)

That doesn’t guarantee you will have a bike available at all time (if it breaks down, you won’t get a new one in a second), but neither do bikeshare programs.

Well, in this case, there may not be enough (literal) space to fit both solutions. Since cities are regulating this, if one solution is generally superior for last mile commuting it will probably take the cake.

There's plenty of space in every US city being used for storage of private automobiles to support both a bike and scooter share program.

  offload the risk of personal property theft
... which somebody always pays for (the customers, if the business survives, investors if it fails).

How about a compromise and people start using the Halbrad [0] instead? It has the upright posture that scooter users seem to like with the pedal action that cyclists are used to, plus you can carry it on public transport. Disclaimer, I want these to take off so that the unit costs come down to the point that I can afford one.

0. https://halbrad.de/

The value in unlocking the 0.5-2mi trip distance makes sense, but the way you describe it seems like the biggest beneficiary is the hypothetical coffee shop that is just a bit too long of a walk away -- they get the benefit of the increased business and customer base, while each individual rider gets only a marginally better coffee, at the cost of a Bird ride.

Perhaps Bird should be looking at hooking up with these sorts of businesses as ways to increase the reach of their locations, either as a co-marketing effort or using the shops as a source of revenue (e.g., sharing value for each ride to & purchase at the shop)?

The benefit to me as a non-coffee-shop-owner is variety. It's not only better coffee, but more options for lunch, groceries, meeting locations, etc.

Definitely, both benefit -- if there was no benefit to the rider, it'd have long since failed.

GP's description just provoked me to notice a new angle

Bird, like Uber before it, is ultimately making a play that in part includes skirting regulation at first, and then pivoting to regulatory capture and alliances with companies who benefit from its services. Just as Uber was practically unlicensed cabs until saturation made it oftentimes politically untenable to ban, entire new regulations were created to fit Uber going forward, and Uber now delivers people to stores and food out of restaurants. In some places, it even has government contracts to serve as a substitute for transit.

Bird is dumping these scooters in cities, and is now working with them to become the preferred provider who is allowed to do this in that city, while others aren't allowed yet. Having that head start is a significant advantage in capturing marketshare. And while a second or later mover can come along and dump their own scooters and convince people to get their app, Bird can then choose to leverage their relationships with governments and businesses and dent the progress of an upstart.

The whole point of VC funding is to build out the capital-intensive parts quickly and develop moats that make switching to later comers difficult. Discussions about how Uber has no moat come up from time to time, but ventures like Uber Eats that form a captive market are demonstrably moat-like. The real question is whether Bird can develop such a moat, or is simply laying the groundwork for some other knockoff to come along later, by which time Bird is low on cash, and all hurdles that would have impacted similar companies have been cleared by Bird.

It's harder to see the tangential markets for Bird to break into analogous to Uber's added verticals like Uber Eats, business travel, freight, etc. Maybe last mile package delivery from a nearby hub?

Maybe they are holding out to become a future Uber Scooters acquisition like Jump Bikes.

One idea I would like to see is Bird rides sponsored by the business you're going to, kind of like how some businesses reimburse a parking garage ticket. It looks like Uber has started offering a program like this [1] as well.

[1]: https://www.uber.com/us/en/business/vouchers/

I never lived in a city with these types of scooters, but I'm just now finding out you don't need to stow them at a docking station.

Guadalajara has a "mibici" bike program ($20/year) where you undock a bike, get 45 minutes on it, and plug it back into a rack somewhere, else the costs mount up. Always assumed these scooter programs worked like that.

Being able to dump the scooter anywhere makes me realize why people consider them such an urban nuisance. Not really something I'd task the average person to do with forethought or courtesy unless it hits them in the wallet.

People often thrown them in other people's backyards, over fences, and into rivers and waterways in order to "make fun".

This business model was never going to work.

Never understood that either. People rutinely dump shopping carts everywhere unless they can recover a few of their dimes by bringing it back.

One cannot say that there were no previous experiences to learn from...

They do? It might be just because of where I live but I can't recall ever seeing a shopping cart outside of the parking lot of a store.

That seemed obvious to everyone though so how did they ever get valued so highly? Is the whole point of companies like this to fool investors into giving them money and then keep the sham up for as long as possible?

Business is complicated, so some people earnestly believe that if they have a bit more time they can work out the bugs. In some cases, this is true. In others, it's not.

When it's not, it may seem like they are deluded or scammers. Maybe they are, but a more charitable interpretation is that business -- especially new businesses -- are like six blind men and an elephant, which means people can strongly disagree about the nature of the beast while both parties are simultaneously right about the pieces they know and understand and both are equally wrong in the aggregate.

You make a paper airplane. You toss it into the wind and see if it flies. No amount of debate (concerning what should fly) changes whether it did or did not actually fly.

VCs are generally greedy and stupid at the same time. They follow the herd more than any other industry. The fact they invest in something means little as to how savvy they are or how successful the product will be. 90% of all startups fail, and there have been plenty of spectacular implosions in the past and there will be plenty of spectacular implosions in the future. Bird will be the WebVan of this business cycle.

(edited to consolidate my comments) Here are the reasons I can think of

1) compelling if it all works out. Invest clear-eyed and hope the founding team figures out the roadblocks. Greedy but not stupid; most successful startups start by 'doing things that don't scale.'

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-...

I agree with Chamath Palihapitiya. VC money is like taking steriods. You get the muscles, but it will disappear once you stop taking them.

I have come to the realization that VCs are really bad at distributing resource. For all these pedigrees to show for, they all seems to be playing musical chairs.

Part of the problem I see is that most VCs don't have a founder background and most of them you meet are pretty arrogant.

So, point two would mean that, in an environment that regards VC finding as success, any good idea, in the sense of getting VC funds, would optimize to tick the right boxes, wouldn't it?

If you think of VCs / founders as a marketplace, which it kindof is, then yes. You have a larger 'market' for selling your startup idea, and optimize the 'product' for 'fit'.

If you think of VCs as totally independent, open-minded, critically thinking professionals, dutifully providing a financial service, then no. You pick the VC for the idea rather than the idea for the VC.

The second case is the ideal, but assumes highly-competent VCs and founders with equalish leverage. I think the perverse incentives for VC partners (read Palihapitiya) and the lack-of-prestige factors for first-time founders break the model. But this seems to be more true for second-time founders with moderate success under their belt.

Given the high percentage of startups that fail, I wonder what percentage of VC funds fail, where perhaps we can define fail as "return less than the S&P 500 over the same timeframe". I imagine the true answer is a much more difficult number to come by. Easier to get late money in a successful company and claim "qualitative success".

There's better data on this than there is for startups. Between 85 and 90 percent of VC funds (which is distinct from VC firms) lose money.

> 90% of all startups fail

There's no way it's that low. Maybe 90% of VC-backed startups, and even then I think it depends on how you massage the definition of 'fail'

It also depends on how you define "startup".

The informal definition we think of day-to-day is fairly fuzzy. There's nuance in differentiating a small business operated by a few people from a startup. Being venture-backed is a simple differentiator but there are still legitimate startups this would exclude, e.g., serial founders who don't need to raise or products that make money early.

With respect to "fail"... is an acquihire or an even-money, 1-3x exit etc a "failure". Probably, yes for the VC, but not necessarily for the founder. Accelerators are incentivized to count "successes" liberally as well.

With a more broad definition of startup, it's easy to see the failure rate at 99%+.


90% failure rate comes from research by Small Biz Trends

A cursory glance at that data tells me it makes no sense. They cite several industries with failure rates substantially below 90%, don't give a single instance of a failure rate greater than 90%, but tell us it averages out that way.

Also real estate businesses only have a 42% failure? So I have a greater than 50% chance of becoming a real estate mogul? I just don't buy it, and I don't believe those other numbers either.

And the only source they cite on the website, http://www.moyak.com/papers/business-startups-entrepreneurs...., doesn't really lend any explanation to their numbers.

I think their data is wildly skewed by sampling bias, as they claim to get their data from interviewing failed founders. Welp, they never interviewed me - how many other people have they never interviewed because they simply never knew the company existed? How many founders, after failing, go out of their way to talk about their failure?

VCs have a strong incentive to create a story that starting a company has a greater chance of success than it does, because it's low-risk for them and they want a churn of potential investment prospects.

I think 1% is a much more realistic number than 10%, unless we're limiting ourselves to Sequoia-backed post-Series A companies.

Just because people have money to burn does not mean they earned it or acquired it through hard work and good thinking. Most people with money are absolute idiots just like everybody else. In fact, in many cases, and especially with wealth inequality as it is, they can afford to be stupid.

I am not joking-- I'm willing to bet that there is a direct correlation between inequality and stupid products/business models making it to market. When you can just keep trying new things until something sticks, you're not going to try very hard or act with much caution.

> how did they ever get valued so highly?

Bird isn’t WeWork. Yes, they’re unviable on a unit basis now. But that’s a hardware problem. They’ve grabbed market share; now they must build margins through R&D. The traditional model is R&D first market capture second, but there isn’t a fundamental reason not to go the other way when the R&D is reasonably feasible.

How is their market share at all secured? It's not hard for anyone else to dump a bunch of scooters in a locale already swamped by Bird. Yes, users would have to install a different app, but my hunch is most users will use whatever scooter is closest and/or in the best repair (even if it means installing another app).

I doubt the app will matter long-term. Mapping and transportation will be dominated by Google, Apple, and maybe Uber. City bikes, scooters, ride hailing, and any other alt transit options will eventually be forced to completely integrate into those apps and be forced to operate as a commodity.

It's pretty irritating to install a new app and go through a new-user onboarding. I know that I've walked past scooters for a competing app in favor of one I'm using.

If I start seeing them around enough I might go to the trouble, but that requires a fair amount of density to start working.

That works - to a price point. There's a threshold where the described behavior is overcome. I'm sure there's a marketing term for it (I don't know it) but the OP is not off-basis.

If some new company with deep enough pockets starts promising No Unlock Fee and $0.15/min, they could quickly capture a lot of Bird, Lime, etc's market share. They'd be burning cash at an unsustainable rate, but there is no moat between these businesses at the moment.

I could see this -- except Lyft and Uber are both getting in on the game, and people already have those apps, so if this is true, it's actually an argument against Bird, not for it.

> But that’s a hardware problem.

I think it's a social engineering problem. If the scooters didn't get routinely destroyed by people 1. smashing them into curbs because it's fun or 2 tossing them in the river because they're obnoxious / blocking the sidewalk, I believe they'd be already be profitable, or at least close.

People hate the scooters. People who ride the scooters hate the scooters. Hell, I like the scooters, and I hate the scooters. :-)

I was walking my dog down Santa Monica Blvd in West Hollywood when I was almost clipped by an idiot riding on the sidewalk while snap chatting. He was perfectly silent and was behind me, so I had no idea he was coming. He could've killed my dog and I would've been in prison for killing him immediately after. Since then I've come to hate scooters with a passion.

A 3 month period of the police targeting this property crime would be awesome.

I would rather see the police spend 3 months ticketing everyone for littering. They are leaving shit on the sidewalks with no licences to do so.

I would also like to see them ticketing the riders for reckless driving/endangering of the people. I almost had an accident 2 weeks ago because some stupid riders decided to race on the street. I also see some of them riding in the sidewalks zipping through pedestrians and many times hitting their bags.

Agreed. That part bugs me. Cities are effectively subsidizing sidewalk space for these scooters that we paid for with tax revenue (and continue to pay to maintain). Most business that want to capture a parking spot need to pay for that privilege, and scooter companies should have to pay for that as well.

And you’ll see that most scooter riders on sidewalks are going max speed. It has made walking in cities with these things a lot more annoying, and it was already bad enough with cars but at least cars are separated from walkers.

This is my thinking as well... however, my assumption is that the majority of R&D will need to go into operations innovation and brand new last mile mobility strategies.

Strong operations will allow bird to continue to cut costs.

(I'm hoping) There's still room to innovate on winterized, electric, single person products.

Their primary business is unavailable to them for half the year in most of the world because of weather, and half of the day. How is this multi-billion dollar business, if they already have 700M in funding and they want another 300M?

I saw them used in the winter. I still see them used all the time in the dead of summer, in Austin.

They mostly replace walking, which people do year-round, throughout the day, and well into the late night. At least this is true in my neighborhood.

Is that the Theranos model?

Fear of missing out. These risky bets fit into the long-shot side of part of a balanced portfolio, and if they do make it, those who have backed them are positioned to make good money. When the appetite of VCs cools, these get dumped on the public stock markets, where the cycle repeats once more.

>> Bird scooters is a completely unviable business.

There's almost certainly a viable business. At the end of the day, it's a question of whether the unit economics will work out. These scooters cost $1K and on average, each scooter gets ridden ten times a day with an average fare of $5. It doesn't take rocket science to see a profitable solution even with maintenance costs. The problem right now is that these companies are being extremely wasteful in order to capture market share.

”and on average, each scooter gets ridden ten times a day with an average fare of $5”

FTA: ”revenue shrank sharply to only about $15 million”. That’s per quarter, so about $160,000 a day. At your claimed $50 revenue a day, that would be 3,200 scooters. Bird operates in over 100 cities worldwide (https://www.bird.co/cities/), so for that to be true, at least one of those cities would have less than 32 scooters.

⇒ it would surprise me if each scooter gets used even once a day, on average.

If the scooters would solar charge and return then somehow automatically, it'd help immensely. Self driving scooter is somewhat further in the future then a self driving car though. The scooters usually even have enough charge left to slowly return home.

This sounds fixable with some technology. So, I'm dreaming here, but a scooter with 2-3 times the battery life, able to self balance and limp (1-2mph, with flashing lights) on the edge of the road (or sidewalk if allowed) back to a charging station (or to a high traffic area based on some predictive algo) would fix almost every problem in their current business plan.

I know that the self driving bit is far from trivial (understatement of the decade) but at very low speed you can stop, get out of the way, phone home for some help.

Simplified scenario, and likely full of holes, but you get my idea.

to boot they are facilitating the hostile usability of urban areas for pedestrians now terrorised by idiots on these.

Given that before self-same idiots would be driving two ton death boxes, this seems like a pretty good trade off to me.

You don't need a license to ride scooters. Yesterday I saw a gaggle of preteens riding a squadron of scooters.

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.

M50 here. Have it, use it, love it.

Hopefully you are responsible and keep off pavements/sidewalks

My jurisdiction actually allows the use on pavements/sidewalks, under the same rules that apply for bicycles.

Must be awful for pedestrians. Where is that?

Incorrect. In London they replace people getting trains for the most part. They also make flagrant use of pavements.

Somehow I doubt that where you live, those "two ton death boxes" are often driven on a sidewalk.

If scooters keep to the road, they are perfectly fine. When they drive on sidewalks, eventually one of them will be biting my elbow.

I've never seen somebody drive a car on the sidewalk.

I see scooteridiots going 15+ MPH on the sidewalk all the time.

To purport that these people drive cars and ride scooters in the same manner is unfair. Same with bicyclists - I witness dozens of them running stop signs and red lights every single day. Can't imagine they do the same in cars.

Well, for what it's worth, they rent their own scooters as well as license out their platform. Perhaps some of the value comes from that.


There could be some compatibility between government bike programs and scooter rentals. My city just installed a ton of rental bikes and now they compete with scooters.

Not sure what the collaboration/execution would be, but that's my first thought.

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.

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.

>> 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...

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.

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.

They could be lying about the 30 mile range. That was my first (cynical) thought.

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.

Ever used a battery-powered weed wacker or leaf blower? The last 30% is basically worthless.

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?

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-...

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.

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.

> 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.

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.

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.

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.

“We’d be making tons of money if we just didn’t spend so much.”

They include depreciation in the calculation, so it's not that bad.

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.

Where does it say it’s “Profitable minus CapEx”?

Sorry “break even”

The company is projecting solid growth in the summer months, when it expects to break even, excluding capital expenditures.

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.

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.

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.

Mine can do hills decently, but it depends massively on your mass.

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...

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.

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.

How could it possibly cost $300 million dollars to create a scooter company?

Salaries. Hundreds of engineers @200k per year is tens of millions of dollars PER YEAR. And that doesn't even include the scooters!

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.

I hope these leaches go out of business. They enable their users to use them in terrible ways.

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?

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.

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!

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...

The big question is when will the VCs take the write down on their quarterly pro forma financial statements!

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.

> 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.

> 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.

In most jurisdictions its just as illegal to ride a scooter while drunk than it is to drive a car while drunk.

Low barrier to entry, and not particularly safe. Jalopnik preferred "minibikes".

However, a great start for eliminating the auto as the primary city transportation.

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?

Bird needs to get serious about docking stations - seeing them littered everywhere in San Diego was depressing. Think this through @bird

Kill them and bring back the bikes!

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.

Bird lost the race and expanded too late. In Europe Lime is dominating.

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...

Seems like that is a link to a Tesla article?

This is the right link I guess: https://news.ycombinator.com/item?id=20412622

on top of giving the correct article, I would appreciate if you could unlock this (related) one too, thanks Jay! https://www.theinformation.com/articles/the-incredible-rise-...?

Thanks a bunch! My, your subscription prices are really high...

Thanks Jay. If you could change or respond with a direct link (that link points to an Elon Musk article)


It's nice that sites out there are thinking "we should do something nice for Hacker News as a way to build buzz."

But kinda defeats the purpose when they didn't actually do what they said they did.

Aw, that's not nice. It was obviously just a slip and they corrected it. I'm sure you were just briefly frustrated about not being able to read the article, but still.

Would you mind reviewing the site guidelines? Note that they include "Be kind."


excuse me but why does the free article ends at "costs:" and omits the last third of the original one?

Thanks for flagging. Small bug that we fixed. Try again. My apologies.

This link takes us to a Tesla article.

the article in link is about elon musk not bird scooters

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.

Good call. Just updated.

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