The scooter startup Bird, which also does business in San Francisco as Scoot, is getting its wings clipped after reportedly overstating revenue for two years, and is now mulling bankruptcy, or discontinuing business altogether.
You’d be forgiven for confusing the names of the three app-powered scooter companies permitted to do business in San Francisco (I know I do). They are Lime, Spin, and Scoot. To make things all the more confusing, Scoot is actually owned by a larger scooter company called Bird, after Bird acquired Scoot in 2019. But there may be fewer of these scooter companies' names to remember in light of a report this afternoon from TechCrunch that Bird may be declaring bankruptcy, or even discontinuing operations altogether.
The big trouble started Friday, or at least it was reported to the SEC on Friday. (And is it weird for a company to submit SEC filings on the Veterans Day holiday? Is that the equivalent of a bad news dump?) Either way, that SEC filing submitted on Veterans Day noted an accounting error of which Bird said “the error resulted in an overstatement of revenue” for both 2020 and 2021. Whether intentional or not, the bad news did not surface in the media until Monday.
“The company was improperly counting preloaded ‘wallet’ balances as revenue after the completion of certain scooter trips,” as The Verge explains. “Now it says its financial reports for 2020 and 2021 can ‘no longer be relied upon.’”
And Bird’s situation sounds incredibly grim. In a separate filing obtained by TechCrunch, Bird said it might “need to scale back or discontinue certain or all of its operations in order to reduce costs or seek bankruptcy protection.”
TechCruch additionally lays out how not-good things look for the scooter company. “Bird has been battling since going public via special purpose acquisition merger in 2021,” TechCrunch explains. “The young company’s dramas have only heightened over the past few months. Since May, Bird has dismantled its retail business, laid off 23% of staff, received a warning from the New York Stock Exchange for trading too low and exited Germany, Sweden, Norway and 'several dozen' markets in the U.S."
Bird may have been on the outs in San Francisco, anyway. A recent Board of Supervisors demand that they install geofencing technology to keep the scooters from running on sidewalks has the company contemplating ending SF operations, according to the Examiner.
But now Bird’s precarious financial predicament might force them to fly the coop anyway, not just in San Francisco, but in every city with Bird and Scoot scooters.
Image: Joe Kukura, SFist