What brings Bird’s ‘business in a box’​ ?

Bird’s franchisee model is a response to an increasingly competitive and supplier driven market. Bird has to excel itself as a hardware and software solution provider to pull this off.

Just about a year ago, Bird jumped the race to micro mobility dominance by introducing electric kicks and becoming the fastest company in the history to reach the unicorn status. Since then the market has expanded rapidly with Lime, Spin, Scoot following on the electric kicks market, albeit with some scepticism. Moreover, Lime, Uber are due to make big inroads into the market with new competitor entry of players like Beam and VOI becoming a regular affair.

While the growth of the company has been phenomenal, it has come with its own challenges in dealing with local perception of the service, policy challenges (E.g. London, Europe’s biggest city-market, remains off-limit for e-kicks operators till date), to outright expulsion from certain markets.

A simple 5 forces analysis reveals:

• Supplier power : It “is a supply driven game, right now!” As the Economist puts it, 90% of the e-kicks (or electric scooter, as they are called in the US) are produced by one supplier-Segway. As Segway innovates continuously, produces high quality scooters at competitive prices and makes it easy for more and more founders to launch similar services, with the tech part becoming ubiquitous (or even part of the package), it is only a matter of securing supply of scooter and get-set-go! High supplier power purely because of the market dominance of one player.
• Threat of New Entrants: As discussed above, a typical operator just needs to go shopping for well-tested hardware and software and start their own service in no time. Low barrier for entry.
• Threat of Substitutes: The micro mobility market is filled with options- there are the conventional bicycles, e-bikes, e-kicks/scooters, e-mopeds and more. Companies like Lime and Scoot remain multimodal and playing these odds/suitable options for each context. Moreover, the e-kick itself was a disruption of the bicycle sharing market and there are no reasons why the future may belong to ever newer services, like e-skates, for example. Med-High threat of substitution.
• Bargaining power of Customers: “A major issue in pricing shared mobility is the willingness to pay per ride versus the willingness to pay for the convenience itself.”It is a hard market to go up in ticket value terms, best illustrated by the bicycle sharing giants stuck at original prices, even in their domestic markets. High bargaining power of customers.
• Competitive Rivalry: Customer loyalty is thin as we have already seen a shift from bicycles to e-kicks and even the willingness of customers to swap been innumerable offerings, sometimes crowding their phone screens in entirety. As discussed above, the competition is only intensifying in the industry and more and more players are attempting to become quick unicorns. High Competitive Rivalry

Essentially, if Bird is not growing fast enough, internationally, and not gaining significant market share while doing so, it will become the first company to a heavily crowded market.

The problem is not only limited to growing fast, but also how to approach the market and how to avoid becoming too big to fail. Yes, you read that right! Let us look at the ofo and Mobike experience of 10s of millions of assets in play in a dynamic market. Arguably, an owned fleet of that size exposed the duo to several challenges unique to large fleet ownership and operations — they were slow to bring customisations and replacements while being exposed to logistics challenges across the globe, only to miss the electric kicks trend completely, allowing the more nimble Bird and Lime to gain multi-billion valuations with a few thousands of assets, in comparison. A ubiquitous brand is also becoming less of an advantage as Lime and Bird discovered recently with cities preferring smaller/younger/local players to the established names.

While Bird can continue to build a formidable fleet, bring more investment for marketing and try its hand at the more challenging markets of EMEA and APAC, it can very well learn the lessons from the market situation and previous failures to build itself as an asset-light enabler of several Bird-chicks (for the lack of a better word), sharing the unique success feathers that built Bird as a unicorn.

It is an alliance/franchise approach to a market that is otherwise overcrowded with similar offerings. The key is to go asset light- “and it is a great thing!” — and to service the franchisees with the next generation of software and hardware — and Bird’s ability to deliver that is the real question — giving them an edge over the established model in the market.

About the author:

Rajarshi Rakesh Sahai is a strategic consulting and general management professional with varied experiences in mobility and urban sector.

He has over 13 years of extensive experience in business advisory, bringing and developing new businesses/ideas and technologies in emerging and global markets, global expansion strategies, reorganizing and optimizing revenue streams (B2B and B2C), setting up operations, and scaling-up of businesses across the competence areas of marketing, PR, operations, finance and leadership.

His international educational background ranges from Development Planning, Urban Development, Environment & Sustainable Development, and Economics. He has additional qualifications in European Urban Studies, Internet & Communication Technologies for Development, and SIDA’s International Training on Efficient Energy Use & Planning. He has an MBA from Indian School of Business and LSE in finance, strategy and public policy.

In his last role in India he led ofo-the largest bicycle sharing company in the world- establishing the basic premise of operator funded dockless bicycle sharing systems in Indian cities, starting with Coimbatore and Pune. In addtion to Public Policy, he provided leadership across communications, BD, partnerships, legal & compliance to a business that grew to 1million rides in 10 weeks. Previously, Rajarshi was the head TRAFI Mobility-as-a-Service app in India for 2 years, leading its business development, marketing, operations and partnerships with government and large private sector players. Rajarshi is contemplating multiple roles in the urban mobility and management sector as of writing of this article.