Bird launches new e-scooter as it pushes for profitability

06.05.2019

Electric scooter sharing start-up says durable new model will have improved lifespan

 

 
Bird is rolling out a new electric scooter that it says can last on the streets for more than a year.

 

Despite continuing scepticism about its business model, the highly valued start-up says its new “Bird One” model can boost its chances of turning a profit.

 

The new vehicle, which Bird designed itself, has a bigger battery and a more durable build compared to the consumer-grade models — most of which are manufactured by China’s Segway-Ninebot — that most e-scooter companies first deployed when the trend emerged 18 months ago.

 

Bird said it would no longer populate its fleet with consumer-grade vehicles, which typically last only three months, and would be gradually replacing them in its existing markets.

 

Extending the useful life of shared e-scooters has become an urgent priority for start-ups such as Bird and Lime, to cut their capital costs.

 

Los Angeles-based Bird will also be selling Bird One directly to consumers, in a departure from its rentals-based business model. Despite Bird achieving a $2bn valuation little more than a year after it launched, some Silicon Valley investors have become concerned that e-scooter rentals can never be profitable, because companies have to invest so much in buying, maintaining and charging their fleets.

 

Nonetheless, venture capital funds continue to pour into scooter start-ups, especially in Europe, where Voi, Flash, Dott and Tier are among the local companies taking on US-based Bird, Lime and Uber.

Travis VanderZanden, Bird’s chief executive, said that the company was already seeing better returns from its first in-house scooter, Bird Zero, which was launched last October.

 

“Bird Zero is actually profitable now, with a lifespan of over 10 months,” Mr VanderZanden said. “We think the economics will be even stronger” with Bird One, he added, while admitting that “the economics just don’t make sense” on the consumer scooters that are still widely deployed on Bird’s platform today.

 

To reach profitability, Mr VanderZanden, a former executive at Lyft and Uber who founded Bird almost two years ago, is experimenting with several new approaches, including monthly rentals in Barcelona and San Francisco — which allows the company to skirt some cities’ restrictions the number of scooters and operators on their streets.

 

For consumers wanting to buy their own, Bird One will cost $1,299, more than twice as much as existing models from Segway-Ninebot.

 

Mr VanderZanden said his vehicle’s battery lasted twice as long as traditional retail scooters and included extra features such as a digital lock, GPS tracking and 20 free rides on Bird’s shared fleet. Bird will make a profit on each sale, he added. Mr VanderZanden said he estimated 80 per cent of the scooter market would still prefer to rent rather than buy.

 

Bird is gearing up to launch in more than 50 more cities across Europe this summer, including in Germany, where e-scooters are about to become street legal for the first time.

To meet the new German requirements, Bird is having to deploy a custom scooter with indicator lights and multiple brakes. After a winter that saw scooter companies forced to pull their fleets off the streets in some cities due to bad weather, “growth is bouncing back very strong,” Mr VanderZanden said. “This spring’s data has proven [scooter sharing] is not a fad.”

 

Financial Times

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