Bird, the electric scooter sharing company, has decided to leave San Francisco. This is a major development for the company that first launched its scooter sharing service in San Francisco back in 2017. In this article, we will explore the reasons why Bird has chosen to cease operations in the city where it all began.
The Permitting Process
One of the main reasons Bird decided to leave San Francisco was the city’s permitting process for electric scooter companies. In 2018, San Francisco launched a permitting program that allowed just two scooter companies to operate in the city. Bird applied for a permit but was not selected as one of the two companies. Instead, the city awarded permits to Scoot and Skip. This meant Bird had to cease operations in San Francisco.
The permitting process severely limited the number of scooter companies allowed to operate in San Francisco. For Bird, it essentially kicked them out of the very city where the company was founded and first launched. The limited number of permits and selection of their competitors instead of Bird was a big blow to the company.
Other Cities’ Permitting Processes
While San Francisco’s permitting process caused issues for Bird, the company has managed to secure permits and operate successfully in many other cities across the United States. Other cities like Portland, Miami, and Atlanta have implemented permitting programs but Bird has continued operating in those markets after securing a permit.
The difference with San Francisco is that the very tight limit of just 2 operators shut Bird out completely. Other cities have allowed 3-5 operators or even more in some cases. While Bird has had to adjust to permitting processes in various cities, San Francisco’s approach with just 2 permits proved especially problematic for Bird continuing operations there.
Increasing Regulations
In addition to the permit issue, Bird decided to leave San Francisco because of the city’s rapidly increasing regulations on electric scooters. Here are some examples of the new regulations San Francisco imposed over the last few years:
- Scooter speed limit reduced to 10 mph
- Required scooters to be locked to fixed objects when not in use
- Required companies to provide rider education
- Imposed caps on the number of scooters allowed citywide
These new regulations began piling up quickly, imposing more requirements and operational challenges for scooter companies like Bird. Having to adhere to the mounting regulations in San Francisco added costs and logistical hurdles for the company.
Fewer Regulations in Other Markets
At the same time San Francisco started imposing more regulations, other markets were much more welcoming to electric scooter companies like Bird. Cities like Austin, TX and Atlanta, GA took a more “light touch” approach and did not put such stringent requirements and limitations on electric scooters.
The increasing difference in the regulatory environment between San Francisco and other cities contributed to Bird’s decision to shift focus away from San Francisco.
San Francisco’s Crowded Micromobility Market
Another factor in Bird’s departure from San Francisco was the city’s rapidly crowded micromobility market. Between dockless bikes, e-bikes, and multiple electric scooter companies, San Francisco found itself with an explosion of new transportation options by 2018.
This level of saturation increased competition and made it difficult for companies like Bird to differentiate themselves in San Francisco. Plus, the tight cap on the number of scooters allowed citywide imposed by San Francisco further limited Bird’s potential for growth and scale in that market.
More Room to Grow in Other Markets
At the same time the micro-mobility space was becoming cramped in San Francisco, other cities offered much more room for expansion and growth:
| City | # of Scooter Companies (2018) |
|---|---|
| San Francisco | 3 |
| Portland | 2 |
| Miami | 1 |
| Atlanta | 2 |
As this table shows, while San Francisco was nearing saturation with 3 scooter companies by 2018, other major markets still had room for 1-2 more entrants. This lack of growth potential due to crowded competition contributed to Bird’s choice to refocus efforts outside its original San Francisco market.
Operational Challenges in San Francisco
Bird also faced unique operational difficulties in San Francisco compared to other markets. Two issues in particular created additional costs and logistical challenges for the company:
Terrain Challenges
San Francisco is known for its hills and difficult terrain. This created challenges in where Bird could place scooters and issues with scooters running low on battery due to the strenuous hills.
Other flatter markets do not pose the same difficulty in terrain. The hills of San Francisco presented an ongoing operational challenge for Bird’s scooter fleet and charging operations.
Parking and Vandalism Problems
San Francisco also saw issues with scooters being improperly parked and left cluttering sidewalks. And vandalism became a problem with scooters frequently being tipped over or damaged. Here are some statistics on scooter issues in San Francisco:
| Issue | Rate in San Francisco |
|---|---|
| Improper Parking | 15-30% of trips |
| Vandalism | 7 damaged/day on average |
These ongoing parking and vandalism problems created significant operational headaches and costs for Bird in maintaining and repairing its San Francisco fleet. Other cities did not exhibit these problems to the same degree.
Bird’s Changing Business Priorities
Some additional factors related to Bird’s overall business strategy and priorities contributed to its decision to leave San Francisco:
Focus on Profitability
By 2019, Bird was focused on shifting from rapid growth at all costs to achieving profitability. The challenging operational environment and regulations in San Francisco made profitability difficult there. Moving resources to other cities improved Bird’s overall profit margin.
Expanding Globally
Bird also began expanding globally into Europe and the Middle East in 2019. Expanding worldwide required resources and operational focus. San Francisco became less of a priority for Bird as it shifted focus to new global markets.
Together, Bird’s changing priorities of profitability and global expansion meant downgrading San Francisco as a priority market relative to other opportunities.
Conclusion
In the end, Bird’s decision to leave San Francisco was driven by a combination of factors:
- The city’s tight permit limits that shut Bird out of the market
- Increasing local regulations that added costs and complexity
- Intense competition as the micro-mobility market became saturated
- Operational challenges specific to San Francisco
- A shift in Bird’s priorities toward profitability and global markets
While San Francisco was the birthplace of Bird, the changing local environment and evolution of Bird’s business needs meant the city was no longer a viable market for the company. Bird’s departure illustrates how quickly market dynamics can shift in the fast growing micro-mobility industry.
