An ex-Uber VP got $15 million for his new electric-scooter startup -- and it's already run into legal trouble

Bird
  • The electric-scooter rental startup Bird has raised $US15 million to expand throughout the US.
  • It launched in September in Santa Monica, California, and has already been hit with a criminal complaint by the city.
  • Dockless bikes have caused some disruption in cities, but Bird argues that it’s different.

SAN FRANCISCO – An electric-scooter rental startup led by a former Uber and Lyft executive that has sparked a legal battle in Santa Monica, California, has landed $US15 million in funding to expand across the US.

Bird is a startup that lets customers rent dockless electric scooters (or “Birds”) with the tap of an app and then leave them on the street when they’re done. It first launched in Santa Monica, the ocean-facing city near Los Angeles, in September – sparking disruption, hundreds of traffic stops, and a criminal complaint against the startup and its founder.

The startup has since expanded to other neighbourhoods in Los Angeles County and San Diego, and on Tuesday it announced it had raised $US15 million in venture-capital funding led by Craft Ventures to support its expansion throughout the US.

The company says it has 50,000 active users and has seen 250,000 rides on its platform. (It isn’t disclosing its valuation or revenue.) The startup aims to have a presence in 50 US markets by the end of 2018, its founder and CEO, Travis VanderZanden, told Business Insider.

But Bird’s rollout thus far hasn’t been entirely smooth.

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‘I think ultimately we all agree Bird is a good thing for the city’

The first the mayor of Santa Monica heard of Bird’s scooters was when VanderZanden sent him a message on LinkedIn after the company launched, The Washington Post previously reported, and the city has since filed a criminal complaint against the startup over its failure to obtain a permit.

“These scooters literally just began showing up on our streets last fall,” Santa Monica’s director of policy, Anuj Gupta, told the paper. “The challenge is that they decided to launch first and figure it out later.”

Asked if he thought Bird made mistakes with its launch, VanderZanden answered carefully: “Our approach is to work with cities very early on in the process, so we reached out, started a dialogue with Santa Monica the week we actually launched … Any time there’s new innovation it’s never clear exactly where you fit into the permitting and regulatory scheme.”

He added: “I’m happy to say in the last month we’ve made a ton of progress working with the city of Santa Monica … Santa Monica is an environmentally friendly city. I think ultimately we all agree Bird is a good thing for the city.”

Dockless bikes have caused mayhem – but Bird argues it’s different

Dockless bicycles booked via an app are growing fast in popularity, pushed by a new flock of transportation startups. They give city-goers a new, healthy, and environmentally friendly way to get around, advocates argue, and can be left wherever is convenient once the user is finished with them, ready for the next customer.

But their rapid proliferation has caused headaches for some cities, as they clutter up public spaces and footpaths, making it harder for people to get around – particularly those with access needs or who use wheelchairs.

VanderZanden argues that Bird’s scooters are unlikely to cause many problems. This is because they’re used nearly constantly, he says, and are collected by the company at the end of every day to be recharged before being redistributed to prearranged spots on private property.

A more pressing concern for the startup may be safety, with a reported 281 traffic stops, 97 citations, and eight accidents in Santa Monica through January and the first week of February. The CEO said he wouldn’t comment on the numbers, but he pointed out that Bird would offer free helmets to users via its app. (Electric-scooter users who ride their vehicles on the roads in California are required by law to wear a helmet. Bird has posted photos and videos to its Instagram account of people without helmets using its scooters on roads.)

“On a percentage basis, we actually think Bird is one of the safest ways to get around town,” he said.

The team includes a whole lot of ex-Uber and Lyft employees

Bird’s team is heavily made up of former employees of on-demand transportation firms like Lyft and Uber. VanderZanden served as the first chief operating officer of Lyft and the vice president of driver growth at Uber.

Bird’s vice president of operations, Stephen Schnell, previously worked at Lyft, as did its head of growth, Ryan Fujiu, and head of launch, Ryan Hupfer. Its vice president of corporate development, Sean Sires, previously worked for Uber.

With $US15 million in its pocket, the team is hoping to bring its scooters to dozens more American cities throughout 2018 – just don’t call them scooters.

The CEO prefers the term “Birds” for the vehicles. “We don’t really like the word scooter,” he said. To him, a scooter sounds too much like a children’s toy. “What we have is almost like a mini Tesla,” he said, adding: “It’s a lot more sophisticated, and it’s a great tool to move people around cities.”

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