Posted on Friday, Jan 4th 2019
A survey of 7,000 people conducted by the research firm Populous found that 3.6% of those surveyed had used a dockless scooter recently. Given the short period of time that dockless scooters have been in business, that is believed to be a much quicker adoption rate than that of dockless bikes. The market is currently dominated by two key players. Billion Dollar Unicorn Bird and Lime, which we had covered recently.
Santa Monica-based Bird was founded in September 2017 by Travis VanderZanden who wanted to set up a company that would redefine transportation solutions. Prior to setting up Bird, Travis had worked at Lyft and Uber, so was well experienced in the ride-sharing world. Similar to Lime, Bird users can find a dockless scooter through their app, unlock the scooter using the QR code on the app, and when done, simply lock, and end the ride on the app.
Currently, the service is available in more than 100 cities in North America, Europe, and the Middle East. Its international locations include Mexico City, Antwerp, Brussels, London, Madrid, Paris, Vienna, Zurich, and Tel Aviv. The company has also tied up with more than 20 universities in the US to provide its services within their campuses.
Like its rival Lime, Bird also charges a flat fee of $1 to ride a scooter plus an additional $0.15 per minute for the ride. Since these scooters are electric and need to be charged, Bird pays gig-workers called Chargers to find scooters, charge them, and redistribute them the next morning. It pays anywhere between $5-$20 for each scooter to be charged fully.
It is still privately held and does not disclose its financials. As of September last year, Bird had recorded more than 10 million rides on its scooters. Analysts estimate that the rides are helping Bird deliver an annual revenue run rate of $250 million as of October 2018. They peg the average revenue per Bird ride at nearly $3.65. In the future, Bird envisions revenues of $70 million from cities like San Francisco where it hopes to deploy as many as 10,000 scooters. Analysts believe that Bird is still not profitable.
Bird has raised $415 million in funding so far from investors including Greycroft, Simon Ventures, Valor Equity Partners, Hinge Capital, Upfront Ventures, Sound Ventures, CRV, Accel, Tusk Ventures, and Sequoia Capital. Its last round was held in June 2018 when it raised $300 million at a valuation of $2 billion. That is a significant growth from the April 2018 valuation of $400 million. Bird will use the newly obtained funds to expand its geographic reach across the country and in international markets. Some believe that Bird may be eyeing the Asian markets of China, India, and the Southeast Asian countries like Indonesia and Singapore.
Regulatory and Legal Concerns
Like other ride sharing services, Bird too faces tremendous legal and regulatory issues. Cities are coming down hard on bike-sharing companies as they cite cases of users leaving scooters lying around with little concern for safety. Additionally, unsafe driving habits among riders are causing serious accidents. In September this year, the first fatality was recorded in Dallas, Texas where a rider died of “blunt force injuries” to the head. Both Bird and Lime are working with regulatory authorities to make the electric scooter operations safer for commuters and city residents.
I would like to know from residents of the cities where these services are operating about their views. Are they truly a nuisance, or is it a small price to pay for the benefits that these services provide?
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns.
Photo Credit: Glenn Beltz/Flickr.com
This segment is a part in the series : Billion Dollar Unicorns
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