Bird Electric Scooters Could Be In More Trouble Than We Thought

Love them or hate them, electric scooters have become a widely-used part of urban mobility in recent years. It's unsurprising that scooter rental and sharing startups like Lime and Bird are popping up all over the place, considering Statista predicts the global market will expand to 124.8 million users by 2026.

Bird is one such scooter rental startup based in California, with rides available everywhere from New York to Antwerp, and even Qatar — which is Bird's first launch in the Middle East. While Bird started out with scooter rentals, it also tried its hand at selling electric scooters and bicycles in December 2021, but has since pivoted resources away from this endeavor again, according to TechCrunch. Unfortunately for Bird, the company has struck some hard times recently. This began with the special acquisition merger in November 2021 that saw the company going public in an effort to generate revenue (per Bird press release), and continued with a massive staff layoff (via TechCrunch). Later came a management reshuffle that saw CEO Travis VanderZanden replaced by Shane Torchiana, as well as the replacement of the company's CFO, CTO, and Chief Vehicle Operator, according to Fortune. The company is facing more serious issues now, though. 

An unprofitable company that over-reported revenue

Like many other scooter rental startups, Bird has struggled to become profitable, and the company's future only looks more and more bleak, given recent evidence. In a report from Bird's CFO, Ben Lu, addressed to the U.S. Securities and Exchange Commission, the company declares that previous revenue figures were inaccurate thanks to reporting irregularities. According to the report, Bird previously over-reported revenue figures by counting user wallet balances as revenue when it should not have. 

The erroneous reporting includes at least 2020 and 2021, and the company said in the report that these previous financial reports are inaccurate and should not be relied on. While the company did state that they are in the process of correcting the inaccurate financial reports, it did not provide any timetable for the updates. The company did, however, identify the source of the false reports as poorly-designed internal controls regarding financial reporting (per SEC report), and has declared that it is in the process of designing and implementing internal controls to ensure accurate financial reporting.