Bird goes bankrupt – what’s the future of shared micro-mobility?

Bird goes bankrupt - what's the future of shared micro-mobility

Since the concept of sharing economy was proposed, it has created a global boom, from sharing bicycles to sharing cars, and now sharing electric bikes and scooters, the sharing economy has penetrated into every corner of life.

However, as the market expands and competition intensifies, the problems of the industry are gradually exposed.

According to overseas media reports, Bird Global, a leading electric scooter sharing company, has fallen into financial difficulties and filed for bankruptcy protection on December 20, bringing the once highly regarded star company to a crashing halt.

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    Financing dependence in the sharing industry

    In the final days of 2023, Bird confirmed that the company has entered into a “financial restructuring process” and will continue to operate as normal in pursuit of “long-term, sustainable growth.”

    Founded in 2017 by former Lyft and Uber executive Travis VanderZanden, Bird is one of a number of startups that have launched dockless micro-mobility platforms around the world that allow city dwellers to pay for short-term use of an electric scooter or bike. What are the best electric scooters for adults?

    The company went public through a SPAC merger at the end of 2021, but its shares have continued to plummet, with a market cap of just $70 million 12 months after falling from more than $2 billion at its debut on the New York Stock Exchange (NYSE).

    The continued decline led the NYSE to issue a warning that Bird’s stock price was too low.

    Financing dependence in the sharing industry

    But things didn’t get any better, and as the stock continued to plummet, CEO VanderZanden left the company in June and it was eventually delisted from the NYSE in September, and Bird announced a round of layoffs shortly after acquiring rival Spin for $19 million.

    Also, the day before Bird confirmed its bankruptcy filing, competitor Micromobility.com delisted due to a drop in its stock price. In Europe, dockless scooter startup Tier also recently laid off 22% of its workforce.

    At one point, Bird was one of the fastest startups to reach a $1 billion valuation, with a 2021 IPO on the New York Stock Exchange, but as the scooter craze faded and investment in the sharing economy as a whole declined, the company’s share price plummeted.

    And in September of this year, the NYSE even began delisting procedures for Bird Global, which has had a significant share economy is seen as a money-burning industry.

    Sharing economy is regarded as a kind of money-burning industry because of the large initial investment, high operating costs, and the difficulty of forming a scale effect in a short period of time.

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    Bird has completed several rounds of financing in just a few years, and has also achieved rapid expansion, but it has been in a loss-making status, has not demonstrated sufficient profitability, and will face a serious financial crisis once the financing channels are tightened.

    In addition, high operating costs were also a major cause of Bird Global’s bankruptcy. Many sharing products face high maintenance costs.

    Vehicles can be vandalized, causing companies to spend a lot of money on repairs and replacements. You can also check how to do the daily maintenance of e-bike for your reference.

    The high cost of purchasing and maintaining e-scooters, combined with operating and management expenses, kept Bird Global’s operating costs high.

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    Bird said in court documents filed last month that the company had a net loss of $73.4 million for the year ended Sept. 30, and last year Bird reported revenues of $244.7 million and a net loss of $358.7 million.

    Bird’s rapid expansion relies mainly on financing to burn money rather than its own blood-creation ability, a business model that may be effective in the short term, but in the long term it is bound to have huge hidden dangers.

    Changes in the market environment

    Shared electric scooters have been popular for some time, but the market heat has gradually cooled over time.

    At the same time, the expansion of the scale of electric scooters has made the number of safety accidents also begin to rise, and the public has doubts about the safety of electric scooters.

    As a result, many cities in the United States have imposed restrictive bans on shared scooters, controlling the number of placements and requiring payment of taxes and fees, and regulatory restrictions have also placed tremendous pressure on Bird Global’s operations.

    Changes in the market environment

    Increased market competition

    As more and more companies enter the shared electric scooter market, the competition becomes extremely fierce.

    In such an environment, companies must continue to invest in product upgrades and marketing, or else they will easily be eliminated.

    On the same day Bird declared bankruptcy, its competitor Micromobility, a U.S. shared electric scooter brand, was also delisted by Nasdaq because its stock price was too low.

    Another competitor, European shared electric scooter brand Tier Mobility, also made its third layoff of the year so far in November, and LINK electric scooter maker Superpedestrian is closing its U.S. operations at the end of December.

    Increased market competition

    While the industry is experiencing a short-term shake-up, the sharing sector still has a promising future, with the number of micro-trip trips in the U.S. and Canada up 5 million from 2021 and 40% since 2018.

    According to data. 113 million trips to the U.S. in 2022, and 17 million trips to Canada. Shared trips are growing in popularity, especially e-bikes, with three-quarters of stations in the U.S. and Canada expanding the number of e-bikes in their fleets.

    The number of microtrips in the U.S. and Canada increased by 5 million trips from 2021, a 40% increase since 2018, according to NACTO 2022 data.

    The number of trips in the United States reached 113 million in 2022. Of these, 34% use bikes and scooters “to get to work,” 39% to run errands, and 50% for “other social or recreational travel.”

    It is worth noting that the conflict between the scooter’s operating model, the escalating cost of use, and the company’s profitability model seems to be leading to the exit of e-scooters from the micro-mobility industry.

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    Perhaps shared scooters will indeed exit the stage of history, but what can be predicted is that small electric vehicles are just getting started, sales of electric bicycles continue to break through, and state subsidies are lowering the threshold for consumers. You can also check the wholesale electric bikes for sale and wholesale electric bikes suppliers for your reference.

    It’s easy to see that the future of the micro-mobility industry is still something to look forward to, but it’s how to choose and how to stick to it . That’s the hardest proposition.

    Bird said that during the bankruptcy process, the company will continue to operate as usual and plans to adjust its capital structure and accelerate the process of profitability through asset sales and restructuring.

    Bird Global’s current situation is a microcosm of the sharing economy industry, which has become a part of urban life, but at the same time brings convenience.

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    It also faces a variety of risks and challenges due to the immaturity of its development model.

    Bird’s bankruptcy has exposed the problems of the industry itself, and is a warning to other companies that they need to adjust their operating strategies in time and find more effective profit models.

    In the future, as technology advances and the market matures, we look forward to a more perfect and stable sharing economy.

    Chocolatezhu
    Chocolatezhu
    Hi, I'm an experienced writer about mechanic and an expert on bike and e-bike tech who appreciates practical, beautifully-engineered things. And of course, I love cycling.
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