On a Saturday afternoon in March, heaps of people in tank tops and flip-flops, sundresses, and casual business attire zip down the bike path along the beach in Santa Monica, California, on matte black electric scooters. Every minute, it seems, a rush of people of all ages whiz by on the same type of scooter. Meet Bird, the next hottest startup in the ride-sharing industry.

Bird, which launched in September 2017, is a shared electric scooter company that allows anyone over 18 with a valid driver's license and a credit card to rent a scooter for $1, plus 15 cents per minute.

The idea behind Bird is simple--the scooters are fun, low-cost, and environmentally friendly ways to get around town without a car, an Uber, or a bus. The scooters, referred to as "Birds," are meant to provide a cheap alternative mode of transportation and ease traffic, says founder and CEO Travis VanderZanden, who was an executive at both Lyft and Uber

At first glance, the electric scooters might look like a silly tech-bro joke, but the company has become a phenomenon in Southern California as users logged over half a million rides since inception. This month, Bird announced that it raised a $100 million Series B funding round, led by Valor Equity Partners, Index Ventures, and previous investors like Craft Ventures and Goldcrest. That follows a $15 million Series A round in February from investors like Tusk Ventures and Upfront Ventures, and last summer's $3 million seed round from friends and family.

Of course, Bird is not alone in the scooter space. LimeBike, a dockless bike company, launched its own electric scooter offshoot called Lime-S this February in Washington, D.C., San Diego, and parts of San Francisco. And despite its success, Bird has run into obstacles--literally and figuratively--in the short time it's been a company. But VanderZanden says Bird plans to hire more employees, lease offices, build more scooters, and expand to 50 new markets in the U.S. by the end of the year.

How to Bird

To ride a Bird, you need to download the app, upload a photo of your license and credit card, open the map, and find the closest scooter. Once you find one, scan the QR code on the handle bar and start your ride. The scooters are dockless and can be left anywhere. Instead of finding a rack like some bike-share companies, you can drop off a Bird right on the sidewalk so long as it's not blocking the public right-of-way. The electric motor will not turn on without being activated with the app, which helps disincentivize theft. The Bird network closes every night at 8 p.m. when the company retrieves the scooters to recharge batteries.

While it won fans quickly, Bird did not have the smoothest takeoff in Santa Monica. In true tech startup fashion, Bird didn't ask for permission, nor did it obtain a license to park on city sidewalks, before launching. One day this past September, residents woke up and found a fleet of electric scooters placed on sidewalks throughout the city. Shortly after the deployment, people were driving them on the sidewalk illegally and teens were causing mayhem by riding scooters in tandem and not obeying traffic laws, says deputy city manager Anuj Gupta. The surprise launch caused a backlash with the local government and community.

Bird did have a business license for its headquarters, but the city said it needed a mobile vendor permit to park its scooters on the sidewalk. VanderZanden says they didn't obtain a vendor permit before launch because they reviewed the licensing options beforehand and felt that Bird didn't fit any of the categories.

"It's clear the mobile vending permit is for food trucks--we are not selling hot dogs and tacos," says VanderZanden. "We felt we were in a gray area."

The city didn't agree with Bird's gray area theory, however. Nor did city officials appreciate how Bird launched without meeting first to discuss its plans. VanderZanden said he tried to reach out to local regulators by sending Santa Monica Mayor Ted Winterer a message via LinkedIn the day before deployment.

By December, the Santa Monica city attorney's office filed a nine-count misdemeanor criminal complaint, accusing VanderZanden and Bird of operating illegally without licenses or city approval. The charges were dismissed after Bird agreed to pay $300,000, obtain a license, and conduct public safety campaigns. Now, the company is giving out free helmets to any user who requests one within the app.

Bird riders have also gotten into trouble. Between Jan. 1 and March 10, Lt. Saul Rodriguez of the Santa Monica Police Department says they have made 575 traffic stops involving electric scooters and issued 273 traffic tickets. There have been nine accidents, including one serious crash where a Bird rider ran a stop sign and got hit by a car. ​

Getting the hang of it

If anything, the company seems to have learned from the setbacks. The rollout in San Diego has been smoother. Bird met with government officials before launching its pilot, obtained the proper permits, and held an educational campaign and helmet giveaway, says San Diego City Council President Barbara Bry.

VanderZanden says the goal going forward is to be "government friendly," a strategy he learned from his second-to-last employer. "Lyft works collaboratively with cities and governments really well," he says.

To that end, the company recently hired David Estrada, former vice president of government relations at Lyft.

VanderZanden hopes the moves will help Bird reach new altitudes, quickly. "Bird doesn't fit in one regulatory category, so we want to work with cities to figure it out and play nice," he says.

Published on: Mar 23, 2018