How Bird, the High-flying Scooter Company, Went Broke (2024)

the money game Dec. 21, 2023

By Kevin T. Dugan, staff writer at Intelligencer, who covers money and business

It was a mere four years ago that Bird, the rent-a-scooter company, was rewarded with a $2.5 billion valuation for clogging up the sidewalks of America with its electric devices. Different times. Back then, it was plausible this Silicon Valley–ish company, flush with cash from venture capitalists and, later, SPAC financing, would capitalize on the very real movement to make cities less reliant on cars and take advantage of the hundreds of miles of bike lanes that New York and other megalopolises were building. People needed to get around, so why not scoot? The thesis, however, didn’t work out exactly the way they thought it would. Now, crushed under the weight of personal injury lawsuits and inflation, the company is worth about $1.3 million and falling and has filed for bankruptcy protection.

To understand why Bird has failed, it’s important to disentangle it from its lofty marketing. The scooter company has a lot in common with another recent crash-and-burn from that era: WeWork. Where WeWork infamously aimed to “elevate the world’s consciousness,” Bird’s wildly ambitious goal was “to make cities more livable by reducing car usage, lowering carbon emissions, and improving the safety of all road users,” according to its securities filings. Its tagline, plastered over the New York Stock Exchange, was “Cleaner Air. Less Traffic. More Joy.” It said it was “actively reducing the hundreds of billions of trips under five miles made by gas-powered cars every year.” The buzzword here was micromobility. Not quite as lofty as Neumann’s cult-y hype machine, but come on: They were renting scooters for $3.90 a mile in some cities. Their goal was to make bazillions of dollars. Even their claim to tamp down our reliance on cars was, putting it generously, a stretch.

And look, that’s just marketing. There’s nothing wrong with trying to make your company synonymous with its industry, but Bird’s problems appear to be their own. Not only has it never been profitable, it’s lost a staggering $430 million since the end of 2021. Its C-suite had a reputation for being less than professional, with its chief operating officer, allegedly getting drunk and firing employees over Slack “as a joke.” (He said that somebody took his phone, apparently bypassing his password or facial recognition.) Yes, the scooter industry has faced problems that weren’t specific to Bird. New York, ostensibly one of the largest markets, delayed scooters’ entry into the state over safety concerns in 2020. Just a few months ago, Paris banned them. But Bird’s main competitor, Lime, is growing and even planning to go public.

Still, Bird always faced a difficult business challenge. It was in competition with ways of getting around like walking (free), public transit (cheap), and driving (expensive but convenient). It was trying to establish a new mode of transportation, even though the necessary infrastructure — bike lanes, pedestrian plazas — was still getting built and perhaps not widespread enough. It bet too heavily on pandemic trends persisting forever. Some of its competitors have also run into these same problems. Revel, once a pox upon Brooklyn, has pulled out of New York City. Lyft no longer wants to fund Citi Bike. And yet more people are using bike lanes than ever before (at least in New York), and sales of e-bikes crossed the 1 million mark last year.

To be fair to the company, it’s possible that its descent into bankruptcy could help turn it around. Personal injury lawsuits are a nuisance for Bird, but it probably should have thought harder about how to avoid dumping tripping hazards onto busy sidewalks if it didn’t want to get sued. The company had hundreds of millions of dollars in debt, much of which got more expensive as interest rates rose. Bird is clearly a product of the heady, pre-pandemic era of the VC-backed tech world. In that way, it’s possible to see Bird as a victim of timing —the right idea with the wrong era of leaders, making the wrong decisions for a market that wasn’t as big as they thought. But there’s still a strong argument to make that people need more ways to get around. Congestion pricing is finally coming to New York, and other cities are likely to follow suit. Subway ridership is up, but the MTA is still plagued by delays. Whether or not Bird can actually emerge from bankruptcy is an open question. What’s more likely is that its vision of the future will live on without it.

How Bird, the High-flying Scooter Company, Went Broke (2024)

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