As college classes began across the country, Bird Rides Inc., an app-based scooter sharing platform, prepared for one of its most aggressive moves yet. The California-based tech company dropped its scooters off in Columbia and on or near 150 other college campuses, without warning local government or university officials.
Bird’s college town takeover is merely the most recent example of a common startup strategy of begging forgiveness rather than asking permission when entering new markets. Scott Latham, a business professor at University of Massachusetts Lowell and veteran of the tech industry, says this is common in the tech field, where social relevance is paramount.
“These companies are trying to build first-mover advantage; that’s what they’re trying to do. They’re trying to get out there so that they get mass. They want to grab real estate. They want to grab customers,” Latham said. “You saw it happen with Uber. They got out of the gate really quick, and they offered a lot of aggressive promotions so that Uber became … the dominant platform.”
Bird has a valuation of $2 billion, Inc. reports, and has raised $415 million in venture capital to date. Latham believes the big funding from venture capital firms has shaped Bird’s aggressive growth model.
“The VCs, I would guarantee, are pressuring them to be very, very aggressive,” Latham said. “Because venture capitalists see these dynamics occur in markets again and again. You don’t want to be … the last to market, you want to be the first mover. Or you want to be the fast follower.”
As Bird attempts to meet investors’ expectations, the company must also navigate regulations with local government officials. Columbia City Councilman Mike Trapp believes some of the time it takes to make laws could have been saved if Bird had communicated better.
“Crafting a legislative solution has costs,” Trapp said.”This absorbs our political space, which is finite.”
In 2014, Uber arrived in Columbia and Trapp was one of the local government officials tasked with developing regulations. The local government’s rules were preempted by statewide laws enacted in 2017.
“This is kind of the Uber model of, ‘just show up and then sort it out later’” Trapp said. “We created a legislative solution that worked for Uber and worked with our community. Then, the state legislature pre-empted all of that. Uber just hired lobbyists and came up with a statewide solution. So, there are limits to what local government can do.”
According to Latham, companies burn through cash on legal fees as they attempt to reach operating agreements in cities across the country. Latham is concerned about Bird’s ability to make a profit with mounting legal and administrative costs.
“I bet their number-one cost right now is buying and distributing the scooters. Number two, I guarantee, is legal. I guarantee it,” Latham said. “This company subcontracts and employs lawyers to fight these cities just to drop their scooters off.”
Before flocking to Columbia, Bird began its growth in larger cities like Los Angeles and Washington. The company arrived in Kansas City in July and was able to reach an interim operating agreement with the city by the end of that month.
“While we have an interim operating agreement in place, we are now working on establishing the pilot program, which may run a year to 18 months. This will give us an opportunity to measure the impacts on our infrastructure and see usage patterns,” Kansas City spokesperson Chris Hernandez said. “Then we will use that data to guide long term policy for these types of businesses. We need to evaluate how and where electric scooters fit into city code, and what changes would need to be made.”
Bird relies on city infrastructure like roads and sidewalks to operate. Latham believes it is important for Bird to work with local government to support the community.
“You can’t have this whole segment of the economy going underground, because they’re using roads that you and I are paying for,” Latham said. “You can’t just go out there or make a profit on the back of the general infrastructure without having a compelling way that you’re going to be supportive of that infrastructure.”
In response to the concerns of government and university officials, Bird recently pledged to facilitate daily pickup and redistribution to avoid blocking sidewalks. The company also said it will remit $1 per vehicle per day to local governments to develop and maintain bike lanes and other shared infrastructure.
Bird will also help cities collect the necessary data they need for policy decisions with a set of technologies dubbed its GovTech Platform. Bird CEO and Founder Travis VanderZanden hopes these moves will foster mutually beneficial relationships.
“The cities we serve are Bird’s number-one customer, and partnering with them to deliver the data, insights, and products they need to advance their mobility programs and reduce congestion in their communities is essential,” VanderZanden said in a press release. “We see this as the next phase in creating true partnership and integration with the more than 40 cities we operate in today.”
Trapp sees the potential for the scooter service in Columbia, but he is committed to the community’s interests, not Bird’s vigorous growth strategy.
“Sometimes I feel they run roughshod over local government and communities. So, I think that’s the balancing act,” Trapp said. “We want Columbia to be a place that welcomes innovation and that is forward looking and takes on new technology challenges, but also that protects the interests of our community and make sure that things are operating in a safe and equitable way.”