[lordnacho]

I want to hear more about Bird's business model. How can it be worthwhile for them to give hundreds of dollars out to have the scooters charged? What do people pay for using the scooters?

As per the article, it also seems incentives are not quite thought out yet, so people can grab the $20 "hard-to-find" fee reasonably easily. It sounds like you can have a friend stash them until the fee goes up, then go and collect it. If this happens to every bike, that's maybe $20 per week? $1k a year per scooter? And I would guess a scooter itself costs a few hundred, as well?

Can you rent out a scooter for a sensible amount? My guess would be that the scooters are not at 100% capacity, otherwise it would be hard to find one. Kinda like the Boris Bikes in London. There's also infrastructure costs involved with maintaining the fleet, making sure they're where rides are likely to originate, marketing, and so on.

[blocked_again]

All of them are VC funded. The cash they are burning is of their investors. The business model should be getting acquired or going public.

[tom_]

Many of these companies make a lot more sense to me if I think of the founders(+select early employees) as the company, the company as the product, the VCs as the customer, and product+customers as the sales pitch.

[ccozan]

Thanks for this very interesting point of view, a company as a product. If you look this way, then a lot of stuff makes sense in the VC/Start-Up world.

[andrei_says_]

Dan Lyon’s Disrupted describes the experience of working at one such startup. It’s brilliant, funny and brutal.

[empath75]

It only makes sense if we’re in a bubble.

[HillaryBriss]

i guess so. but what causes these persistently bubbly conditions?

the top 1-2% have very large cash hoards they absolutely must invest. and they can't just go around opening laundromats, liquor stores and flipping houses. that's chicken feed. it requires too much attention. too much work.

there are challenges investing in the really big global growth stories (e.g. China): state ownership has the upper hand. they can be forced into a loss position by the state.

yet, vanishingly few are smart enough to predict the rise of Facebook or Google. so what can they do? take shots in the dark in the US tech economy until they hit something large.

[e40]

The upper echelons are awash in cash. The ratcheting down of taxes on corporations and profits, frees up that capital for investment. There is more capital than sane investments, at this point.

[petra]

I don't understand the "it requires too much attention". Isn't that what managers are for ? Assuming your opportunities are profitable enough , just hire enough managers and be done with it?

[BrandonM]

It could also make sense if there's so much inefficiency in the job market (hiring, retention, etc.) that large companies can afford to make VCs whole just to lock in productive employees for a couple years.

[kerng]

I like this! Had never thought of it that way, but you are correct I believe.

[rciorba]

Spot on!

[PakG1]

In the first example, the acquirer takes the loss, but can hopefully provide enough cash for the acquired company to survive until the company figures it out (see YouTube). In the second model, the shareholders take the loss; there is no sugar daddy to continually provide cash without significantly hurting current shareholders.

[tlrobinson]

https://techcrunch.com/2018/04/10/how-to-understand-the-fina...

Anecdotally, working/charged/available scooters are hard to find in downtown San Francisco.

[moltar]

Bixi bike rental system exists for many years now. The only city as far as I know that is not profitable is Montreal, ironically the city of bixi headquarters and where it started from. The same system, under other names, exists in other major cities around the world.

They have even more expenses and infra to support. They need to install and dismantle docking stations every season, which requires cranes and trucks in 100s of locations. They have staff that drives around and picks up bikes for repairs. They have stuff driving around and re-distributing bikes when they end up in one location (eg metro after rush hour). All of the staff gets salary, of course. Many trucks and specialized trailers had to be purchased. Lots of capital needed to run something like this.

And for scooters all they had to buy was the scooters and build an app.

[rfrey]

Bixi made a 3 or 4 year go of it in Toronto before exiting the market. So it could be that all their locations (except Montreal) are profitable because they exit markets where they are losing money (except Montreal).

If that's true it raises the interesting question about why it works in some cities and not in others, since presumably the operations by Bixi are equally competent in the various places they open.

[CydeWeys]

It could just be that bike shares aren't profitable in northerly cities with long cold winters.

[tedmiston]

Sometimes founders keep a home city alive despite being unprofitable as a symbol if nothing else. Like when clothing companies have expensive flagships in NYC that are more about marketing than being stores.

[danso]

> Riders can locate and unlock scooters using the company’s smartphone app, and after paying the $1 unlocking fee are charged 15 cents per minute during use.

[geezerjay]

Back of the napkin calculations suggest that, in order to break even just from the charging costs alone, each scooter needs to be ridden for at least 2 and a half hours. Based on some quick googling (but without taking into account the terrain and the rider's weight and riding style), a scooter with a full load can be ridden for about 6 hours.

[bigiain]

Looks like you're assuming every charge costs them $20. From my (admittedly skimmed) reading of the article - that's a special case for scooters that've "gone missing", and is effectively a "reward for finding and returning it".

[xexers]

Correct. $20 appears to be the exception. The majority of charges seem to be worth $5

Source:

https://www.reddit.com/r/TrueReddit/comments/8l12oj/electric...

[RainaRelanah]

6 hours is nowhere near accurate, it's closer to 2 hours in ideal circumstances. 1-1.5 hrs in most usage scenarios. 6 hours is about how long it takes to charge.

[Tepix]

Six hours?

The Xiaomi M365 that is used as a base for many of these e-scooters has a real-life range of around 20km and a top speed of 25km/h (a 280Wh battery and a 250W motor with 500W peak performance).

So the battery can be drained in one hour if you're moving quickly.

[ralusek]

So best case scenario, let's assume that each ride is 15 minutes, that means 24 rides in the 6 hours. If we also assume full 6 hour usage, we end up with (24 rides * $1) + (360 min * $0.15).

So best case seems like $78 revenue per charge.

[simias]

That's really a best case and that's not counting the maintenance costs (replacing the broken/stolen scooters in particular). They seem to pay the "chargers" extremely well currently, I'm sure they're still in the bootstrapping stage and not actually trying to make money. One person quoted in the article even says he expects the reward to be lowered eventually.

[ralusek]

I actually didn't include any costs, just revenue.

[Tepix]

6 hours is inaccurate. It's more like 1-1.5hours of actual use.

[_fizz_buzz_]

Your calculation is completely off. 150 min * 0.15 $/min = $22.50. In the US you can get a kWh for about 12 cents. That means you can get 187.5 kWh. The largest Tesla Model S has a 100 kWh. I don't know what kind of battery these scooters have, but I am sure it's not nearly as big as a Tesla battery.

[geezerjay]

> Your calculation is completely off.

Ah, someone complaining online how some random person's back of the napkin calculations are off.

Let's see if the nitpicker has a case.

> 150 min * 0.15 $/min = $22.50.

So, let's actually do the math:

* $24/0.15 = 160 minutes

Wow. Completely off.

[masklinn]

> I don't know what kind of battery these scooters have, but I am sure it's not nearly as big as a Tesla battery.

280Wh. They have nowhere near 6h range either, the machine is advertised for a range of 18.6 miles and a top speed of 15.5, though it has regenerative braking which can improve the range a bit.

It's a pretty standard Xiaomi M365: https://www.amazon.com/gp/product/B076KKX4BC/

[Tepix]

Their actual range is around 20km (12.5 miles).

[makomk]

The electricity costs aren't the problem, the big cost here is paying people to collect the scooters up and charge them. As the article points out the cost of electricity makes up such a tiny amount of this cost that it's not even worth calculating.

[pwg]

And, from reading the article, the cost of the electricity comes out of the "finders fee". So those that charge them receive $5-$20 each, minus their cost of electricity to recharge them. So if most scooters only receive the $5 "finders fee" then Bird is paying a flat $5 per scooter for finding, recharging, and returning the scooters.

It costs $1 to 'unlock' and $0.15/minute after that. So a $5 payment requires: 1 unlock $1 and $4.00@0.15/min = 26.7 minutes of "usage" (note, not ride, usage, the 0.15 is paid per minute that a user has the scooter "unlocked") before the $5 "finders fee" is repaid by one scooter and one rider.

The numbers shift of course if the same scooter is "unlocked" by plural individuals during the day, due to the $1 unlock fee. Five usages of a few minutes each for a single scooter in a single day repays the $5 "finders fee" just with the $1 unlock fees alone.

[jaclaz]

>And, from reading the article, the cost of the electricity comes out of the "finders fee". So those that charge them receive $5-$20 each, minus their cost of electricity to recharge them.

To be picky, since these chargers/gathererers are largely teens living with their parents, the cost for recharge comes from the household utility bill (not paid by the kid).

Surely it is a trifling amount, but to it you must sum the miles with the car/minivan used for the search and pickup (which costs is as well at least partially subsidized by the parents).

[pyrale]

* Another poster provided a technical sheet asserting a 280Wh battery and 250W motor [1], which means the scooter can be discharged in slightly more than an hour. * Getting electricity at $.15/KWh [2] means that you essentially have no cost recharging the battery.

This means that, while there is no business riding and reloading (aside from, essentially, having rides at 40% off), it is profitable to empty a scooter and reload it yourself, provided you can trigger the increased fee.

[1] https://www.amazon.com/gp/product/B076KKX4BC/ [2] https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...

[jiveturkey]

no way bird is getting the $1 themselves. that’s the swipe fee.

[bigiain]

There's another important task they do though - they collect them up from random locations, charge them, and then drop them off at pre determined locations, "nests".

I reckon the bicycle ride rental (no it's not "sharing"!) companies would be less hated here if they had a crew of teenagers making good pocket money returning all the out-of-the-way (mostly at-the-bottom-of-hills) bikes to locations where people expected/wanted to rent them...

[IncRnd]

I doubt it truly is profitable for Bird, which most likely is paying out from VC cash not from their own revenue cash.

This model is an inversion of tool or car rental, where the renter returns the device or pays a late fee. Here, Bird chases after you to get their devices back. When scooters are difficult to recover, Bird pays more to the finder for recovering them.

Bird almost certainly plans to sell themselves at some point through some sort of offering in the future. Renting scooters today is just an incidental.

[samnwa]

They only pay $5 per Bird per night. If each Bird "works" only 3 hours a day on 15 minute trips, that's about $30 a day earned per Bird. They probably get the scooters for ~$300 so each one pays itself off in 10 days. Call it 12 to account for damaged Birds. Extrapolate that out to say, 1000 Birds in a City, and that's at least $1MM in revenue monthly per city.

[SonicSoul]

3 hours seems very optimistic. Also what about the cost of actually running the company ? It exists even if it doesn’t directly handle scooters day to day

[yungchin]

Yes but going by these numbers, even 1 hour of use a day would produce a marginal profit on every scooter added. An hour sounds attainable. And coming up with clever operations hacks that push utilisation towards two hours a day sounds like the sort of challenge that most startup founders would love to be dealing with :)

(edit: another comment in this thread mentions the current batteries only last one hour, so that probably limits daily usage.... taking the long view that's ok I think, because at this point it seems a safe bet that batteries will be a lot cheaper in a few years time.)

[jonknee]

The alternative to is hire staff and vehicles to go on scavenger hunts around the city, also an expensive thing to do (I see Lime Bike vans around Seattle, can't be cheap). The scooters that need charging are ones that have had paid rides, so the economics should be workable at some equilibrium.

[Shivetya]

There are all sorts of costs here and risks. How much is Bird paying per scooter? Each charger? I have not gone through the sign up process? Are you on the hook for the chargers or does Bird just send them out and hope for the best?

Besides the obvious strife between fellow "chargers" it won't be long before cities get into the act and pass ordinances or enforce them to take them off the streets until they get their share as well. Figure that a whole licensing scheme will pop up and eventually be used to squeeze out smaller competitors who try to get into this arena

[Tepix]

The Xiaomi M365 costs around 330€ ($390) in Europe when on sale.

I don't think there's a large profit margin in that price given the price of a 280Wh battery and the other components.

These companies also have to add some parts to the scooters such as GPS.