Wall Street Journal writer Marc Vartabedian reported recently that, “Shared-electric-scooter startups have blazed into cities across the world over the past two years. Fueled by roughly $1.5 billion in venture capital, industry leaders Bird Rides Inc. and Lime raced to set up sprawling networks of scooter fleets that users can rent with an app.
“Over the past year, that breakneck pace of global growth—which has enabled users in more than 200 cities across the world to rent a scooter for a few hours and pay with their phones—has caught up with these companies.
“Lime and Bird’s ambitious expansions outpaced operations set up essentially on the fly, according to more than a dozen current and former employees. The spotty logistics of their networks have weighed on the companies’ efforts to become profitable and led to safety concerns that this could endanger riders, these people allege.”
The Journal article noted that, “The renewed focus comes as the pair face pressure to transition from cash-hemorrhaging startups to profitable businesses after public investors hammered a string of highly valued but money-losing technology companies last year. Investors, including prominent Silicon Valley firms, have plowed roughly $3 billion into Bird, Lime and a handful of smaller scooter startups since 2017, according to data provider PitchBook Data Inc. Investors have valued Lime and Bird at roughly $2.5 billion each.”
Mr. Vartabedian explained that, “Also riding on Bird and Lime’s ability to remake their operations is the issue of safety. Mechanics for both startups say parts shortages affected markets suddenly and would often force them to scavenge parts—including brakes, wheels and throttles—from other broken scooters to make fixes.”
