One Bird Charger estimates that he took on $40,000 in scooter debt
By the time that Daniel got a surprise call from someone at Bird this spring, things seemed dire for the dockless scooter industry. A 35-year-old former jet engine mechanic for the military, Daniel had been supporting his family of five by charging dockless e-scooters in San Diego, California, earning an average of $500 a day in the summer months, with the help of a sprinter van and generators he purchased so that he could collect and charge more scooters simultaneously. But payouts from the scooter giants Bird and Lime suddenly dropped late last year. Then, Lime left town in January, and the Covid-19 crisis hit shortly after, tanking demand for the scooters that remained. Now he was barely able to pay his bills.
The Bird salesman complimented Daniel on his work ethic and said he had a special offer. If Daniel would agree to buy his own fleet of scooters from Bird — worth thousands of dollars — Bird would finance the entire deal upfront at no interest. In exchange, Daniel would get to run his own e-scooter business.
“I would buy scooters, they would finance scooters for me, and basically [they were] telling me that I would have my own area,” Daniel says.
Since the pandemic began, Bird has been quietly changing its business model by convincing its contract workers to invest in the scooter equipment themselves. While the company announced a “franchise” program in 2018, at the time, it primarily marketed the concept to entrepreneurs, local bike shops, and other independent operators. Bird has never acknowledged that it is now offering financing on scooters to people who cannot afford to buy them outright, a strategy that seems intended to convince the company’s struggling contract workers to sign on.
After the cuts in charger pay last year, Daniel saw his earnings drop to less than $100 a day. He lost some trust in Bird as a result, and he didn’t have a lawyer to look over the new financing deal that Bird was offering him. But not seeing any easy way to start a new career in the middle of a pandemic, he decided to go for it. “At this point, I’m desperate. I will try just about anything,” he said.
He now has his own fleet of one hundred Bird Zero scooters, a heavier, more rugged generation of scooter designed by the company Okai. Bird is selling the Okai scooters anywhere between $200 to $620, depending on how much they have been used, according to paperwork from one contract obtained by OneZero. In total, Daniel estimates that he took on $40,000 in scooter debt.
OneZero spoke to seven contractors, who are now called “fleet managers,” and reviewed internal Slack messages and other documents detailing some aspects of the program. Fleet managers in three cities tell OneZero that there are between 12 to 30 others in each of their markets who have joined the program. The arrangement ensures that Bird continues to make money off of scooter rides. At the same time, it saddles the contract workers with thousands of dollars of debt on scooters they will technically never own, in addition to repair costs and possible liability for any accidents that occur.
“At this point, I’m desperate. I will try just about anything.”
According to a contract obtained by OneZero, the fleet managers don’t actually own the scooters. The title to the scooters will remain with Bird, even after the fleet managers pay off the scooter debt. Bird calls the scooter payments “equipment fees,” and the fees don’t go away if a scooter is lost or broken. The fleet managers are expected to pay for them even if the contract is terminated, according to the legal fine print.
Among other questionable terms that the workers agreed to when they bought into the deal with Bird is a non-disclosure agreement that says they cannot disparage Bird or discuss the business with anyone, and so every worker who spoke to OneZero asked that their name not be used. (Daniel and all other fleet manager names in this piece are pseudonyms.)
In a statement to OneZero, Bird said it changed its business in response to the pandemic. “We had to fundamentally adapt our operations when Covid-19 irreversibly impacted the communities and cities in which we operate,” the statement reads in part. “Today, we are proud to provide the Fleet Manager program as a way to help local businesses and entrepreneurs get back to work in a socially distanced way as they deploy and rebalance fleets in their communities and provide general care and maintenance for the vehicles.”
Bird declined to respond to a list of specific questions from OneZero.
Most Bird fleet managers who bought in and spoke to OneZero are happy with the money they’ve been making so far, pointing to the strong popularity of scooters even in the middle of a pandemic. They compare the business model to owning a franchise. But they are unclear about what legal protections they have, or what will happen if business slows down, as it tends to do when it gets colder.
Some of the fleet managers also say that they don’t feel like they are really their own bosses given Bird’s productivity demands and payments on leased equipment.
With the help of GPS data, Bird keeps a close watch on the fleet managers, who say they are expected to keep most of their scooters on the street every day. If a scooter has been out-of-circulation for more than a few days, fleet managers get a Slack message or email from data analysts at Bird. One fleet manager who wanted to take a vacation said that Bird asked that he find someone else to manage his scooters while he was gone.
The fleet managers’ revenue comes from scooter rides and is paid out by Bird in a weekly check. Bird takes 30% out of each fleet manager’s paycheck to pay off their scooter debt, in addition to a 20% service fee, and an additional city fee, a sales tax fee, and a promotional fee, according to one invoice provided to OneZero.The fees and the equipment payments that Bird withholds amount to about 70% of the fleet managers’ weekly earnings.
Promotions from Bird, like offering “free rides,” come out of the weekly pay of the fleet managers, who have no control over Bird’s marketing.
After the fleet managers pay off their debt, they keep 80% of earnings from all rides, while Bird keeps the remaining 20% as a “service fee” for running the app — though whether the 20% is taken out before or after the additional fees is unclear to fleet managers. That would make being a fleet manager far more profitable than being a charger because scooters don’t need to be charged until they’ve been ridden for several hours, and bounties in some cities last year dropped to $3.
Meanwhile, Bird scooters currently generate $1 in sales each time someone unlocks a device to ride it, and then an additional 39 cents each minute after that, at least according to the rider app when accessed in Long Beach, California. (The fleet managers do not know the exact rates that riders pay.) If a fleet manager has 100 scooters on the street all the time, and multiple people riding each scooter in a day, the revenue can add up quickly.
“Honestly, I was really surprised to see how many people were out riding scooters,” one fleet manager says.
The fleet manager, who is based in Indianapolis, says his profit — higher than most because he does not hire additional workers to help him — has been as much as $5,000 in a single week after paying out Bird.
Another fleet manager in San Diego says that his background working in a factory prepared him for the job. “It’s kind of addictive, and I’ll tell you why: You’re getting good money,” he says. He works seven days a week and estimates that it earns him about $1,500 in profits.
Picking a scooter up off the street, charging it overnight, and returning it to somewhere with foot traffic might not seem like complicated work. But in 2018, the height of the dockless scooter boom, charging scooters paid good money, especially for people who don’t mind lifting equipment or going off the beaten path. Companies like Bird, Lime, Skip, and Spin placed “bounties” on scooters with low batteries, with higher bounties for charging scooters that hadn’t been retrieved in days. Workers who invested in it like a small business were rewarded with big payouts.
The scooter business is best in the summer months, so the full-time chargers were already expecting fewer scooters to be available to charge as fall and winter approached last year. But at the end of last year, former chargers say, Bird and Lime both cut charger pay to its lowest point ever, “just to see how little people would work for,” as the fleet manager in Indianapolis described it to OneZero.
“It was very weird that I would be in [Zoom] city council meetings, and I wouldn’t see one person from Bird.”
As fleet managers, they can make good money again. They’re just not sure how long it will last.
Like Daniel, Charlie became a charger in 2018 and turned the work into his primary source of income, renting a warehouse and buying generators to increase his scooter capacity. Business was good until companies scaled back their fleets as a public health response to Covid-19. That was when Charlie got the call from Bird inviting him to become a fleet manager. Charlie purchased a second truck and hired workers, paying them between $15 and $35 an hour, to help manage his new fleet of scooters. Business was going well again until September 1, when the city of Dallas, where Charlie is based, suddenly issued a temporary ban on scooters, citing complaints about large groups of people “joyriding” at night. Any scooter seen on city streets now is at risk of getting impounded.
Since then, Charlie has let his two workers go and is dipping into his savings to pay his bills. He thought about going to Austin, where officials allow Bird and three other companies to operate a limited number of scooters, but the Bird contract prevents him from working with any competitors.
He and about 30 other fleet managers in Dallas have been meeting with city officials over Zoom to try to lobby for reopening of the scooter market. It’s an old fight that has played out in American cities ever since the scooter industry took off. But this time, there was no lobbyist from Bird at the meetings. All of the people fighting to keep scooters on the street were fleet managers, Charlie said.
“It was very weird that I would be in [Zoom] city council meetings, and I wouldn’t see one person from Bird,” Charlie said.
He thought about returning his scooters but fears that he will still owe payments on his scooter debt. He heard that Bird will forgive the debt if a fleet manager quits the program, but the contract states otherwise. According to the contract, the fleet managers have to continue paying off the scooter equipment no matter what happens. Additionally, Bird says that it bears no responsibility for maintaining its app if a government entity decides to suddenly ban scooters.
Before the Covid-19 crisis, which prompted Bird to lay off 400 people via Zoom call, Bird scooters were maintained by mechanics who were employed by Bird. But now, the mechanic work is the responsibility of fleet managers, who agree in the contract to keep the scooters in safe and good condition and to carry their own insurance.
The public’s enthusiasm for destroying scooters hasn’t dwindled in the pandemic, and now it’s the fleet managers who must pay for it. People have super glued the throttles, driven over scooters with their cars, tossed them in rivers and canals, and hit them with sledgehammers. Scooters have ended up in impound, in the back of stranger’s cars, or in the middle of this summer’s protests against police violence — one fleet manager says he was teargassed while saving his scooters.
The fleet managers purchase new parts that they need for the scooters from Bird’s Shopify page, meaning that Bird can also make money off repairs.
Catherine Lerer, a personal injury attorney who is working on a class-action lawsuit claiming that Lime and Bird scooters are defective and prone to sudden braking, said that the arrangement could also make contractors vulnerable in the lawsuits. Riders agree to a liability waiver when they sign up, but plaintiffs can get around that if they can prove “gross negligence” in the company’s handling of the scooters. “It’s just putting a lot of the burden and the responsibilities on the chargers,” Lerer said.
“I don’t have a life. I have scooters.”
Liability issues may be one reason why Bird offloaded the scooters on its chargers. Some fleet managers say that the Covid-19 crisis also posed an existential threat to the scooter business model. If more cities decide to outlaw scooters, it may now be the fleet managers who take the fall.
“Worldwide, everything was shut down,” another fleet manager said. “And that kind of gave them an opportunity, in my opinion, to reevaluate the business model. And that’s when they came up with this.”
Bird isn’t the only company in the gig economy that has moved to the franchise model. When FedEx faced lawsuits for keeping its drivers as independent contractors rather than employing them, it started a new system of labeling drivers as “independent providers” who supposedly had more power than regular workers. Uber is now considering its own franchise program to get around AB 5, the new law in California that was designed to give gig workers the right to be treated as employees.
Daniel, the former jet engine mechanic who took on $40,000 worth of scooter debt, says that his scooters have been generating thousands of dollars in revenue each week. Bird demands that he keep 95% of his scooters on the street and keeps the pressure on him even when his scooters are in the repair shop, he says. If he can’t keep up with Bird’s “performance metrics,” Bird threatens to take away some of his scooters, which he fears would lower his daily earnings. The stress of that keeps him working all the time. He has spent some nights camping in his van on the street to study the public’s scooter habits.
Picking up heavy scooters day after day is starting to strain Daniel’s back, so he pays two others $500 each a week to help him. After paying them and paying the fees to Bird, he takes home about $1,500 an average week in profits. He wavers from feeling grateful that he’s working and employing others to feeling that Bird may be taking advantage of him. “I don’t have a life,” he says. “I have scooters.”
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Bird Is Quietly Luring Contract Workers Into Debt Through a New Scooter Scheme - OneZero
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