Scooter Company Owes 300 Cities Money

By: Lauren | Published: Jan 03, 2024

For a time, it seemed that shared electric scooters were the business to be in, especially if you were involved with the startup star Bird.

However, while the world expected Bird and its scooters to thrive after such an exciting start, the company has just told the world it is officially declaring bankruptcy and that it owes millions of dollars to more than 300 cities around the world.

The Business Model

In 2017, Travis VanderZanden, who had previously worked for Uber, had an idea to create an electric scooter ride-share fleet in Santa Monica, California.

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Bird Founder & CEO Travis VanderZanden speaks onstage during TechCrunch Disrupt San Francisco 2019

Source: Steve Jennings/Getty Images

Residents and tourists could pick up the scooter at a charging station, drive it comfortably to their destination, and — this was the best part — leave them wherever they wanted.

Beating the Traffic

Travis VanderZanden told Santa Monica Daily Press, “We know the city has parking and traffic problems like the rest of LA. We feel like it’s a great city for all of those reasons, and we feel Bird can have a big impact on traffic and parking.”

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Heavy traffic is seen in Manhattan on May 12, 2022, in New York City

Source: Spencer Platt/Getty Images

And while some were skeptical of the idea, such as the Santa Monica mobility manager, then Francie Steffan, decided, “The most healthy way is to offer a diversity of options that coexist for the long term.”

Bird’s Big Success

VanderZanden’s company, which he called Bird, was an immediate success. And since things went so well for them in Santa Monica, they took their idea up to the Bay Area within the first year.

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People ride Bird, shared dockless electric scooters along Venice Beach on August 13, 2018, in Los Angeles, California

Source: Mario Tama/Getty Images

By 2018, Bird was valued at $1 billion, and at that time, it was the fastest startup to ever hit that milestone.

It Wasn’t All Smooth Sailing

Although financially it seemed like Bird was doing great, behind the scenes, there was quite a bit of drama.

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Bird billboard reading “Cleaner air. Less Traffic. More Joy” in NYC

Source: @CNBC/X

Bird was facing lawsuits left and right for functioning without a valid license, as well as a cease-and-desist from a lawyer in San Francisco.

The Scooters Were Proving Problematic

As well as its less-than-perfect business practices, Bird was always facing intense scrutiny for how its scooters were being used.

Bird scooters left on the ground between the sidewalk and the street

Source: @Insidershut/X

Users were riding them illegally on sidewalks and leaving them haphazardly on the street when they were done. People were riding without any safety gear, and they, as well as the pedestrians around them, were consistently getting injured.

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Bird Kept the Party Going

Even with all the drama, VanderZanden decided to continue to grow Bird. Not only were the scooters available all over the U.S., but they could also be found in Canada, Australia, Portugal, France, and many other countries.

A woman moves e-scooters behind parked Bird e-scooters in Marques de Pombal Square on May 20, 2019, in Lisbon, Portugal

Source: Horacio Villalobos/Corbis/Getty Images

But overgrowth and underuse led to immediate financial issues; in 2021 Bird went public with an estimated value of $2.3 billion, but it did not do well on the stock market.

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The Final Year of Bird

Toward the end of 2022, Bird’s stock was all but worthless, and it was soon taken off the New York Stock Exchange.

Traders work on the floor of the New York Stock Exchange during morning trading on November 17, 2022, in New York City

Source: Michael M. Santiago/Getty Images

Founder and CEO Travis VanderZanden was fired from his role as CEO, and it soon became clear that Bird had been lying for years about its actual revenue.

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Bird Goes Bankrupt

In November 2022, the company officially filed for Chapter 11 bankruptcy. Apparently, the move was tactical, and the company plans to keep going but with fewer debts.

A sign leading to the U.S. Bankruptcy Court in Lower Manhattan

Source: Chris Hondros/Getty Images

And they do have quite a bit of debt; experts report that they owe anywhere between $100 million and $500 million to more than 300 cities, including the $5 million it owes to Amazon Web Services.

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A New CEO at the Wheel

After VanderZanden was removed from his position of CEO just before the filing became public, Michael Washinushi was hired for the role.

Newly appointed CEO of Bird, Michael Washinushi

Source: Crunchbase

And while he certainly has a big task in front of him, Washinushi appears hopeful that he can get Bird back on track.

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What Bird CEO Has to Say

Michael Washinushi said in a company statement regarding the bankruptcy, “This announcement represents a significant milestone in Bird’s transformation.”

Bird scooters on the sidewalk in Los Angeles, California

Source: Smith Collection/Gado/Getty Images

He continued, “We remain focused on our mission to make cities more livable by using micro-mobility to reduce car usage, traffic, and carbon emissions.”

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Bird Scooters Aren’t Going Anywhere

It’s still unclear whether Bird will scale back its operations from the over 350 cities where it currently operates.

A user rides a Bird scooter on April 17, 2018, in San Francisco, California

Source: Justin Sullivan/Getty Images

However, it seems that, at least for the time being, people around the world can still expect to see Bird scooters driving through the streets.

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