Bird, the electric scooter startup, has raised $418 million and has been valued at $2 billion. It has been reported that it was the fastest startup to achieve ‘unicorn’ status. One of the investors is Sequoia Capital, and Roelof Botha, a partner there, said he sees San Francisco one day having 10,000 Bird scooters, potentially earning $70 million a year in revenues.
However, in the spring of 2018, San Francisco issued a cease-and-desist letter to Bird, Spin, and Lime. So, contrary to the vision of having 10,000 Birds on the streets of San Francisco, it appeared maybe there wouldn’t be any. One issue with dropping scores of electric rental scooters within urban public spaces is the lack of regulations. Cities with sudden scooter inundations were unaware of how to handle them. Even with time to consider the various issues, the city of San Francisco, at least right now, doesn’t appear too open to having a large number of them, saying “San Francisco’s new 12-month pilot plan will issue permits to five companies, capping the number of scooters at 1,250 for the first six months, with the possibility of doubling that in the second six months.” That would be 2,500 scooters total from five companies, or 500 per company — nowhere near 10,000 from a single company.
Bird’s roll out in Milwaukee had a similar effect — the city government was considering a ban, because “Aldermen expressed concern about a variety of issues tied to the scooters, including helmet use, liability issues and Bird’s user agreement. Committee members also mentioned they had received complaints about the scooters, including from a pregnant woman who had been hit by a rider.” The Nashville rollout did result in a ban, which was later rescinded and replaced with a pilot program. It shares a condition with electric scooter rentals in San Francisco: a rather restricted cap on the number of scooters allowed. In Nashville, each company can have only 500 scooters in the first month of the pilot program, and up to 1,000 in the third. There would also be requirements for scooter operation. “As part of the application process, operators would be required to obtain a certificate of public necessity and convenience by submitting an application to the Metropolitan Transportation Licensing Commission. Operators would also have to obtain insurance.”
Austin, Texas, also banned them temporarily, until it created some regulatory oversight, including a per company cap of 500 scooters. The city of Beverly Hills banned Birds, and the city of Los Angeles was considering a ban. Two cities in Massachusetts banned them as well, and the Massachusetts state Department of Transportation began looking into whether or not Birds violate local law because they don’t have brake lights or turn signals.
The Bird roll out strategy was, to put it gently, perhaps not handled all that well. Dropping off electric scooters in cities without permission resulted in regulatory pushback and sometimes outrage from residents. Some folks were vandalizing Birds, throwing them in bodies of water to sink, and off roofs — sometimes even placing excrement on them. In fact, there is an Instagram account called the Birdgraveyard to document various attacks on the polarizing technology. In addition to all the regulatory issues, there have been many rider injuries. Some Bird riders don’t wear helmets, or any kind of protective gear like wrist guards, elbow pads, or knee pads.
If you haven’t ever ridden an electric scooter, you can’t simply jump on one and start riding. Some customers have ridden them on sidewalks, which is dangerous for pedestrians and riders. Bird scooters have also been left haphazardly on sidewalks and sometimes near entrances and exits to buildings. They have also been ridden tandem, which is unsafe.
There have been enough rider accidents that a number of law firms have been interested in getting involved in personal injury lawsuits, “Catherine Lerer, one half of McGee Lerer’s husband-and-wife legal team, says she got the first scooter-related call about five months ago. A 16-year-old boy had been injured falling from a Bird scooter, and the family wanted to make a claim. The phone has been ringing ever since. Many of the mishaps involve young riders who broke a collarbone or an arm in a single-rider accident, when the brakes locked or they lost control of the scooter, Lerer says.” A blog post on the Cedar Sinai website noted the types of injuries. “ERs and clinics are seeing concussions and fractured skulls along with broken legs, wrists, elbows, and hips related to the scooters.”
If Bird establishes itself in various cities, there likely will be an increase in the number of rider accidents and injuries. It’s a grisly consideration, but ER, hospital, and medical clinic visits will probably increase, although this is not the kind of business healthcare professionals want to see expanding. Personal injury lawyers may also seen an uptick in cases, so scooter proliferation might be good for their practices, but perhaps not for many other businesses.
The rationale for having electric scooters cropping up in public spaces is helping people get to where they need to go more efficiently, but this notion might be faulty. Firstly, demand from the public for them doesn’t appear to have been documented carefully or proven. Secondly, there are already local businesses in operation providing rental options for personal transportation like bikes and e-bikes. The spontaneous emergence of e-scooters reportedly could be hurting them, “I sit here all day on my phone. We don’t get to rent out half the stuff we rent out just because of Bird. [And] we were the first and only electric shop on Venice Beach,” said Joey Crowell from BeachFront Bike in Venice, CA. In Baltimore, a city bike sharing program was partially done in by the appearance of Bird and Lime dockless rentals. Obviously, the end of such a program means no more new bike purchases or jobs maintaining the fleet.
The problem is that established businesses pay property and sales taxes which support their local communities, and it isn’t clear if Bird is. It seems as what they are doing is exploiting local communities by trying to flout regulations and make as much money as they can. Local bike shops employ community members in sales, rentals, repairs, and maintenance. They are often owned and operated by entrepreneurs, not very powerful corporations. In some cases, their presence adds to the culture and vibrancy of communities they serve and the owners live locally, so they have a greater personal investment.
Recent research showed that biking is the healthiest form of non-motorized personal transportation, stating that “cycling is the mode of transport associated with the greatest health benefits: better self-perceived general health, better mental health and fewer feelings of loneliness.”
Riding an e-scooter is not nearly as vigorous as walking or riding a bike, but physical exercise is associated both with better health and economic outcomes. Various research studies have documented the economic benefits of bike lanes in roads and bikeable trails. For example, a study backed by the Southern California Association of Governments generated some telling insights, “When normalized by ATRTP spending, every $1 spent in support of more walkable and bikeable communities is expected to increase sales output by $8.41.”
Furthermore, “Sales output is strongly influenced by construction spending rippling through the economy: $26.6 billion or 24% of the cumulative benefit is from construction, programmatic, and strategic spending. This equates to $1.97 in output from construction and strategy spending for every $1 spent on the AT-RTP. Improvements in labor productivity due to healthier workers is the largest contributor to increased sales output; $79.5 billion or approximately 70% of economic growth is attributable to labor productivity gains.” Replacing walking and bikes with e-scooters could have a wide range of negative effects on local businesses and economies — including increased healthcare costs and reduced productivity.
If some local businesses and jobs are going to be negatively impacted by the e-scooter’s business model, what kind of jobs does Bird provide? The e-scooter startup pays contract workers to pick up scooters on the streets, recharge them, and then put them back. They also have contract mechanics to maintain and repair them. Contractors don’t receive any benefits and the pay is typically low. They are paid per scooter serviced, but they also have costs, so the take-home pay may not be much.
“People just don’t understand it, when they get into things like depreciation… Say you’re driving your car around to pick up scooters — your car experiences depreciation, you’re paying for car insurance, and the bounty doesn’t cover all of the costs of operations that you have as an independent contractor… so then you end up making $2 an hour or something when you offset your cost against whatever the bounty is,” labor blogger Kati Sipp. Bird chargers often are teenagers and young adults who want some extra money, but the work scenarios can be dodgy. In a few cases, competing for scooters on the streets has become contentious. “One time I pulled up to pick up a scooter, I got there maybe 10 seconds before the other guy did. He started yelling at me. He picked up a Bird scooter and started beating my car. I got the hell out of there,” a charger who lives in San Diego.
Some Bird hunters have also been targeted by criminals, so finding and collecting scooters may not be all that appropriate for teens. “I’d tell anyone getting into this to be safe. I’d say to others: Bring mace or a taser because there’s a lot of crazy people out there, even the [chargers themselves]. I’ve had people yell at me, threaten me. It’s the Wild West,” explained one Bird collector.
At this point in time, because of the all the chaos and issues associated with Bird, it’s difficult to predict what impacts the company could have on local businesses and communities. It doesn’t look like it will be a constructive one. In fact, there’s something potentially disturbing about the company’s strategy at the regulatory level. The Bird multi-city roll out, which ignored a reasonable amount of communication with government officials, including police and transportation departments, may not only have been a mistake.
CNet reported that Bird sponsored a bill in California to eliminate helmet and driver’s license requirements for renting an electric scooter, but they are in place for very good reasons — to protect riders. The Bird bill would also raise the top speed allowed for an electric scooter to 20 mph, from the current 15 mph. Again, this change to the law seems to go against rider safety. That’s not all though, the bill would also allow electric scooters to be ridden on sidewalks. Why would they be involved with such a bill?
Perhaps the mayor of Fresno summed up the situation very well when he said, “We will continue to embrace different forms of transportation, but not at the expense of safety or public process. We appreciate Bird’s eagerness to establish themselves here before their competitors do, but it’s not fair to the thousands of businesses in Fresno who play by the rules, received the proper permits and licenses, and are operating legally.”
To put it simply, some of the company’s actions potentially suggest a recklessness in the ways it has related to the communities it has tried to operate in, and that doesn’t appear to bode well for local businesses.
Image Credit: CC BY-SA 4.0, Wikipedia,
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