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Comment by aresant | Hacker News Reader

Handful of interesting points:

a) Scoot raised something like $47,000,000. This article reports a cash and stock deal of $25,000,000.

b) Scoot launched in 2012 and spent their first 6 years renting mopeds and electric bikes, only recently launching what we all think of as "scooters" in late 2018.

c) The founder illustrates what Scoot saw as a gigantic problem in the space - theft and vandalism (1). He then wrote a follow-up post a few months later illustrating their solution - a proprietary lock adapter from their bike sharing network (2). I wonder if we'll see this technology rolled out @ Bird?

(1) https://medium.com/@mbkeating/what-we-learned-from-our-first...

(2) https://medium.com/@mbkeating/one-of-our-kicks-was-stolen-la...

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Maybe, but I'm pretty sure that the newest generation of Bird scooters are more difficult to hardwire. As far as I'm aware, nobody has done so yet, but most of them are still older generation and can be easily have their circuit boards replaced with ones for Xiaomi scooters(basically Bird scooters but without Bird's SIM card or GPS).

Vandalism is a far bigger problem for them, though, since most people don't have the skills(or rather the confidence) to hotwire a Bird scooter.

I read the average life on these scooters is 30 days before they are completely wrecked. People don't need to hotwire them to take them; I've seen teenagers riding them while locked and just pushing them along un powered, scooter beeping away.

That's interesting, because I know that Lime's scooters have their front wheel locked when not in ride-mode. (though thieves can basically just lift up the front wheel and push it away on the back one) I had no idea kids were just pushing away Bird scooters! I guess it makes sense the Bird scooters don't lock because the Xiaomi scooters they use are cheaper than comparable ones made by Segway, which is what Lime uses. Bird probably just decided it wasn't worth deterring thieves, at least initially.

I don't have much sympathy for these scooter companies, though, since their MO is to illegally dump scooters in cities and beg for forgiveness later.

I've found no information at all on how the wrecked scooters get recycled. You can't necessarily just repair scooters infinitely, and I imagine a lot of them just go into a dumpster because it's cheaper just to buy more scooters from Xiaomi.

This lifetime estimate is based on one town in the US. It can be wildly different in different markets.

> The founder illustrates what Scoot saw as a gigantic problem in the space - theft and vandalism

Is this actually a serious impediment to the scooter business model? Bulk electric scooters can be sourced from Chinese manufacturers for <$200. The ride sharing services charge $0.15/minute.

You breakeven in 24 hours of ride time. Assuming 30% utilization during peak hours and 10% off hours, the payback time is less than two weeks of deployment. You'd have to expect 5-10% of your fleet to be vandalized/stolen every day, before it breaks the margins.

Their costs are higher than just the scooters. Not intimately familiar with either business, but I'd expect the scooters themselves to be on of the smaller costs. The infrastructure to charge them I'd expect to be one of the bigger ones, at least early on. Maybe on an on-going basis if that requires people to go retrieve scooters, etc. And I'd want a proprietary lock long before theft had actually eliminated my entire margin.

Also, don't forget the telecom costs.

The Information reported they (Bird) were paying $551 with a goal of reducing it to $360 per scooter. The unit economics are pretty atrocious, tbh. These scooters aren't designed for continuous operation out in the wild, for the average American girth, on anything other than a flat surface -- so they break a lot.

The average lifespan is 32 days (median 28) -- and only goes 85 miles over 70 trips. Average is 1.63 miles per trip, 18 minutes long, and 3.49 rides per day on average. That's why scooter rides are so expensive compared to JUMP, for instance. [1] Some napkin math indicates they lose (at minimum) $267 per scooter.

[1] https://www.theinformation.com/articles/inside-birds-scooter...

This was true back then, when Bird and most other companies were using m365 and esx scooters. The newer generation of scooters is way more durable, and have better battery life. The reality now with scooters like the Bird Zero is that churn is at least 10 months, which is more than enough to pay the vehicle and operational cost 7.5x

Disclaimer: I work in this space.

Interesting, though this slice/dice of the data [1] figuring in all known expense quantities show that they only make a net of $2.32 per day in Louisville. Even if we take 10 months that's still just under $700. Those economics do look a lot better, but don't more durable/beefier scooters cost more? I'm not seeing a way to get 7.5X back no matter how the numbers are finagled.

Curious how they know the scooters will last 10 months when new versions can't have been out in the wild in quantity for more than a single quarter.

To be clear, I'm not saying it can't be done, I'm just hoping to learn more about whether it has yet.

[1] https://qz.com/1561654/how-long-does-a-scooter-last-less-tha...

Having seen what people do those scooters I can’t imagine any model lasting ten months on the street.

I'm curious, do you know what scooter model Skip uses in SF? I've also seen Bird use it in San Jose and possibly elsewhere. It has a Segway label.

That model is fantastic. Very pleasant brake, and it is much more powerful than the one Scoot uses. The Segway one gets me up some of the hills in SF, whereas the Scoot one is woefully underpowered, a joke for a hilly city like SF.

They are decent scooters but I wish they had suspension + pneumatic tires. I still find the retail M365 to be much more pleasant to ride.

I actually fell pretty hard from a Skip scooter going slightly downhill in SF because their active breaking gave up on me while going downhill (maybe 20deg angle, not even too steep) I could have dealt with that but even worse it would keep turning itself on and off so the traction would keep changing, because the power connection must have been loose (or battery too low -- this was before they started warning you about a low battery on the app) or something.

They did at least add that battery warning, though. That was an important update.

Do you mean 2 degrees? 20 is very steep.

20 degrees seems about standard for San Francisco. That's only a 5% grade in road parlance.

20° is a 36.4% grade [1].

New Zealand's Baldwin Street [2] is the world's steepest residential street, according to Guinness World Records, with a slope of 19°.

San Francisco's Filbert Street has a gradient of 17.5° [3] and that's that's steep enough that it has steps.

Of course, a road can be "very steep" and "normal for SF" at the same time! IMHO even if a road is very steep, if you're hiring scooters in a city the brakes (and geometry) should be good enough that an average rider can safely descend the city's steepest roads.

[1] https://www.engineeringtoolbox.com/slope-degrees-gradient-gr... [2] https://en.wikipedia.org/wiki/Baldwin_Street [3] https://en.wikipedia.org/wiki/Filbert_Street_(San_Francisco)

The way that I was trying to eyeball it was "45° is is kind of like a stairway", this was probably half as intense as that. :)

Either a Segway ES2 or ES4

Most companies have moved to Segway Ninebot Max already.

The ninebot max looks basically exactly like the xiaomi mi scooter pro:

https://www.mi.com/global/mi-electric-scooter-pro/

https://store.segway.com/ninebot-kickscooter-max

and I've seen other like those too. Are all those just some rebranded chinese frame?

Xiaomi owns part of ninebot segway. So for sure.

Oh wow. I had no idea it was that bad.

Scoot was primarily renting out full-size street-legal mopeds that you need a driver's license to drive, not the little $200 scooter things that you stand on.

Did they come with helmets? Or not require them?

they came with helmets

They also pay people to charge the scooters.

I've seen people in México City doing this late at night. I wonder if they are aware of the real costs of their services. Also, do they only pick scooters below a certain battery level? I observed one crew that picked one but left the other one next to it.

They have algorithms to pick which scooters should be moved and charged and compute a price to pay the people who charge them. You ideally want all your scooters to be fully charged before rush hour in the morning.

This also depends on the market. Not all cities have worked out with the freelancer charging model.

Youre completely off with your assumptions. Source: Work in the industry.

Care to enlighten us? I've always thought the scooters-as-a-service business model seemed bonkers but apparently a lot of people (including yourself?) disagree, so what am I missing?

No at the moment I am quite sure it is absolutely bonkers, and this acquisition for much lower than the "valuation" gives some support for that.

However there are some potential caveats which could turn the whole game around. The thing is that when doing scooter profitability calculus, there are few inputs that when changed can have a massive effect. Some of these could be: Scooter durability, Scooter Battery life, Effect of theft & vandalism, cost of charging.

This low acquisition price might make you think: Bird got an awesome deal.

But it should also make you think: Bird isn't worth much.

Scooter and bike rental companies aren't worth much. They never have been.

Scoot operated, poorly, in a very small market. Look at Bird or Lime, they operate literally in hundreds of cities.

In the hypothetical case that they were buying Lime instead, the number would be at least 50 times bigger.

How does losing money on a larger scale lead to profit?

I don't know, man. Ask Uber, lol

because it's an indicator of future profit stemming from growth that may be the cause of the spending.

it doesn't always work out that way, but it has sometimes in the past for big payouts, so it's a common strategy and economic forecast indicator.

you gotta burn cash to grow. Maybe this will lead to bird developing Bird Web Services and eventually making a ton of money each quarter. It worked for Amazon :)

Burning cash to grow worked for Amazon because distribution/logistics is a business that has a fundamental relationship between scale and costs.

Bird, Scoot, Uber, Lyft and everybody else has yet to demonstrate that by scaling dramatically that they lower their costs enough to break even, much less generate SaaS margins.

Until then... They are highly speculative businesses.

That’s totally different. Amazon could have been profitable any time they wanted; they chose to reinvest for growth instead. Not all losing money is the same!

Bird is to Lime what Scoot is to Bird. In Europe all cities are swarmed with Lime but Bird is unheard of.

I always assumed Scoot's model was to iterate until they'd really polished the product, and then get an infusion of cash (ideally just a loan though probably VC money) and start expanding to a lot more cities.

The fact that Bird got 10x as much VC money and targeted hundreds of cities from the get-go doesn't make Bird any better, it just means Bird went the "large funding" route.

yeah they lose money on every unit, but they make up for it in volume

Bird has already started rolling out Bluetooth-based locks in some markets. They're kind of a hack - they're separate Bluetooth devices that are bolted onto the stem, and the unlock step is separate from the scooter unlock step.

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