Unit economics of Bird scooters

Michael Babich
Apr 17, 2018 · 2 min read

The best way to measure P/L is to take one charge cycle of a scooter as a measure unit — it got pretty much standard revenue per cycle which is compensated by cost of charging — and understand the amount of cycles it requires for a scooter to breakeven. Basically, every cycle a scooter survives after, it generates revenue.

Bird charges $1 to start a ride and $0.15 for every minute. It uses Xiaomi Mi Electric Scooter. There are many reviews by its users on YouTube. So we can assume average driving metrics and charging time. I took lifetime of a scooter in the financial model assumptions by Haje Jan Kamps from Bolt. These fellas know what they talk about.

Finally, by measuring how many cycles can fit in one day we get operational days and days to breakeven.

Properly speaking, considering that Xiaomi tries to make its gadgets as cheap as possible, but preserve high quality standards, I’d say that this scooter is very good if one owns and takes care of it, but I’m not sure it can survive such rental public use very long. For ride rental there should be more robust scooters with higher capacity swappable batteries and more powerful chargers — rides per charge cycle and charging time influence business model tremendously.

Basically, every day the scooter survives after 86 cycles, 258 rides, or 43 days, it generates profit.

Add to the numbers SG&A expenses and business barely holds up. Interestingly, bikes/scooter rental business is not a two-sided marketplace and, hence, nobody builds a moat here. Having enough VC money for initial setup and app investment anybody could just in one night place on a city streets 100–200 scooters and pay just about $40,000–$80,000 for them to start.

China experience shows that this type of business is more useful as complementary within a bigger company that has more revenue generation services. Massive consolidations and acquisitions are inevitable.

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Entrepreneur’s [13] Notes

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