A sombre tone has struck the micromobility industry after Bird filed for bankruptcy and Superpedestrian announced the closure of its US operations within the same week.
The news comes with the near end of what’s been a challenging year for micromobility operators after Tier also recently announced a 22% layoff of its workforce.
As winter gets underway, the news hasn’t perhaps been a surprise to key players in the industry.
“We knew that it was only a matter of time before some players left the market,” Julien Chamussy, CEO of mobility data provider Fluctuo, told Zag Daily.
“Some operators have not achieved their shift to profitability, which is unsurprising given the narrow timeframe in which to do it. With less revenue coming in during the winter, some companies – not limited to Bird and Superpedesrian – are in desperate need of external funding.”
Bird’s bankruptcy
Bird filed for Chapter 11 bankruptcy which means the operator will see a restructure to its financial operations without disrupting its daily services. A $25 million loan from Apollo Global Management and second-lien lenders is keeping Bird afloat through the bankruptcy proceedings.
Bird’s Canadian and European operations will continue as normal and do not constitute part of the bankruptcy filing.
While the news is certainly disheartening, Julien believes it’s difficult to predict what’s next for Bird – what once was one of the fastest startups to reach a $1 billion valuation.
“It’s too early to speculate on the future of Bird in Europe. They significantly trimmed their operations down in 2023, leaving Germany, Sweden, and a host of other European countries to focus on profitability. Whilst the outlook doesn’t look great, to count them out of the fight now would be a mistake.”
Superpedestrian ceasing US operations
The last week has also seen Superpedestrian announce the ceasing of its US operations from 31 December.
Superpedestrian revealed the shutdown is due to financial reasons, though it comes after the operator raised $125 million in its Series C funding last year.
However, Julien highlights that it was difficult for the operator to leave as big a mark in the industry as other prominent players.
“With less than 10,000 scooters generating approximately 2.6 million rides in 25 cities in 2023, they have never really played in the same league as Lime, TIER, Bolt or Voi,” he said. “Whilst they won important tenders in Vienna and Palermo, disappointments in Madrid and Rome proved very costly.”
The micromobility landscape
What the landscape has shown is that few micromobility operators are immune to a forced downsize, no matter their scale.
In fact, Brandon Schuh, Senior Vice-President of insurance company Christensen Group, spoke of the further difficulties that some ‘bigger’ operators might face.
“Unfortunately, the first-to-market micromobility companies had to bear the burden of finding out the dos and don’ts the hard way,” he told Zag Daily.
“This is a very resource intensive business model. It requires a lot of human capital and a lot of CapEx spending. Second and third-to-market companies have the fortune of seeing what didn’t work, along with piggybacking on the technology advancements.
“Superpedestrian and Bird pioneered some of the early technology in the space, requiring lots of R&D and lots of CapEx spending.”
Brandon also highlighted the further difficulties that operators had to overcome from the pandemic such as the cost to borrow.
Nevertheless, he’s optimistic about what’s to come.
“I do think this will spell good news for the remaining entities in the space. We appear to be at an inflection point now where the remaining companies would be able to scale and make money moving forward. Insurance is obviously a big part of the cost for these operators. It’s also a big barrier to entry. So those that remain, may flourish.”
Zag’s Industry Expert Vivian Myrtetus also offers her thoughts for what the future needs to see to avoid another challenging year for the industry.
“Challenges faced by the entire scooter industry require companies to be agile, adaptable, and innovative in order to navigate through uncertain times and ensure the sustainability of their operations,” she said.
“As 2023 comes to a close, it’s no surprise the shared scooter industry continues to see consolidation. Recent news about Bird’s bankruptcy, Superpedestrian’s operational shutdown and Micromobility.com’s delisting notice rounds out a difficult year for the industry.”
