The Traffic Group

Scooter Operations

The Verge recently ran an article entitled “How Bird plans to blanket the world with electric scooters without going bankrupt.”

Written by Andrew J. Hawkins, the article discusses how Bird is outsourcing its scooter-sharing business to aspiring entrepreneurs in countries outside the United States and Europe.

If you’ve known anyone in the electric scooter-sharing business, you already have a good idea of how expensive and hard it is to run such an operation. The scooters (Bird’s are manufactured by its partners in China) break down regularly. They are often vandalized or impounded by local law enforcement. As a result, every scooter company operating today is operating at a loss.

But Bird has an interesting plan to spread the gospel of the scooter without going bankrupt. It involves selling e-scooters to local entrepreneurs, providing them with advice and technical support to get started, letting them incur all the costs associated with maintenance and operations, and then taking a small percentage of the cost of each scooter trip.

Known as the “Bird Platform,” this approach is almost identical to the way in which companies like Uber and Lyft operate.

Bird is planning to roll out its Bird Platform in three markets – New Zealand, Canada, and Latin America. The company plans to take 20% of each trip fare. Fares normally cost $1 to unlock a scooter then $.15 per minute of riding. While Bird anticipates users and entrepreneurs would set their own prices, it expects the average trip to generate about $3.75 in revenue for the company.

It is an interesting move by Bird, especially considering how wildly unsustainable the scooter-sharing business is turning out to be. A recent study by Alison Griswold crunched the numbers for scooters in Louisville, Kentucky. The study found that the median scooter took 75 trips over 85 miles and had a life span of only 23 days. Right now, scooters are not living long enough to earn a profit.

Given those stats, Bird is manufacturing a new, longer lasting, and more rugged scooter known as the Bird Zero. It will be interesting to see how that works and – bigger picture – how many scooter companies ultimately survive. Given the odds, though, it seems to me that it is so inexpensive to use a scooter that the cost to use them could easily be increased without impacting ridership.