Bird cuts 30% of workforce
Bird to lay off 30% of workers as cities shut down and people shun high-touch vehicles.
Scooter company and its competitor Lime begin layoffs due to pandemic.
Dockless scooter companies charged into cities in 2018, promising a mobility revolution with cheap, clean rides and billions of dollars in venture capital backing. Yet they soon faced roadblocks, including shaky business models, safety concerns and fast-moving city regulators.
At the start of 2020, cashlosing operators were shrinking their headcounts and vehicle fleets.
Now as governments around the world fight to slow the spread of the coronavirus, the companies are facing a deeper existential challenge.
The two largest, Lime and Bird, drastically reduced fleets by mid-March.
Santa Monica-based Bird began major layoffs Friday, cutting 30% of its workforce “due to the financial and operational impact” of the pandemic, according to a memo from Chief Executive Travis VanderZanden. “We just raised hundreds of millions from investors,” VanderZanden wrote, “but given all the uncertainty, we needed to ensure a cash runway to last through the end of 2021.”
Several other start-ups, including Wheels and Uberowned Jump, say they’re looking at how to keep operating as people are ordered to stay at home and rider demand plummets.
The appeal of sharing a high-touch vehicle with an unknown number of strangers has succumbed to the fear of viral transmission.
Lime is “winding down or pausing” service in all markets but South Korea, CEO Brad Bao said. Jump has paused electric bike and scooter rentals in most of its European markets and trimmed the size of its fleets across the U.S. Lyft Inc. has continued to operate its network of mostly docked bikeshare systems in eight U.S. markets.
The sudden disappearance of scooters and e-bikes comes after months of industry turbulence. Bird and Lime have struggled to raise money from investors, and both cut staff starting late last year. The companies, once singularly focused on growth, have realized their problematic business plans need rethinking.
Last year, talks of an acquisition of Bird or Lime by Uber didn’t pan out. Some industry watchers said the eye-popping valuations of each — in 2019, Bird and Lime hit $2.5 billion and $2.4 billion, respectively — were a factor.
Wheels and Lime say ridership was rising before the start of widespread social distancing.
Many investors, already skeptical about the viability of the e-scooter business, say the current situation could be the nail in the industry’s coffin.
Emily Castor Warren, a principal and director of policy at the transportation planning firm Nelson\ Nygaard and a former director of policy at both Lyft and Lime, agreed that the pandemic could be a death knell for scooter businesses with large overhead costs, especially those that were already in an uncertain financial position.
“I think it’s pretty dire,” she says. “If these lockdowns persist, they’re going to have to, at the very least, undertake major layoffs to core teams, because the one cost they can’t bring down to zero is salaries for headcount and real estate for their offices.”