Thousands of the Santa Monica start-up’s signature black-and-white scooters appeared on street corners across the world, bought with venture capital and rented to smartphone-toting riders.Investors saw how quickly riders took to the new mode of transit, and visions of Uber-size growth and revenues flitted through their heads. In March 2018, just six months after the first Bird hit the pavement, venture funds poured in $100 million. In June, they dumped an additional $300 million.
The first ill omens came in January, when the company quietly raised another $300 million at the same $2-billion valuation. In an industry that prizes a perpetual uptick in valuation to propel a narrative of constant growth, a flat round spells trouble, and often a desperate need for cash. By unit economics, VanderZanden meant the simple math of making money on each scooter dropped into the world. And while trying to make money might seem like a basic imperative for any business, it goes counter to the preferred pattern for 18-month-old start-ups flush with venture capital cash.
“It’s not that there isn’t a viable business model for these companies,” said Dmitry Shevelenko, an investor who’s worked at Uber, advised Bird competitor Skip and is building a company that would allow scooters to slowly drive themselves to meet users or dock at charging stations. “It’s just not the Uber business model — that’s what Bird and Lime were raising against, and that’s where there probably will be a correction.
But based on a Times review of data used in Bird’s smartphone application, even the supposedly new and improved models are falling short. Suster, who works closely with Bird as an investor, echoed the company’s stance. “I assure you, the negative narrative is not correct,” he said. The company also raised prices on its core dockless product in cities across America. Riders once paid a dollar to unlock a scooter, and then a flat rate of 15 cents per minute of riding. Now, per-minute fees have increased to 25 cents in Los Angeles and Austin, 29 cents in Baltimore, and 33 cents in Detroit and Charlotte. In other cities such as Bloomington, Ind., and Charlottesville, Va., rates went down to 10 cents per minute.
Many cited a section of Uber’s recent regulatory filings, which predicted that a majority of trips under three miles will happen on electric scooters as opposed to cars in the near future.
Source: News Formal (newsformal.com)
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