An ex-Uber VP got $15 million for his new electric scooter startup - and it's already causing chaos

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  • Electric scooter rental startup Bird has raised $15 million to expand throughout the US.
  • It launched in September 2017 in Santa Monica, California, and has already been hit with a criminal complaint by the city.
  • Dockless bikes have caused some disruption in cities, but Bird argues that it's different.

SAN FRANCISCO - An electric scooter rental startup led by a former Uber and Lyft executive that has caused chaos in Santa Monica has landed $15 million in funding to expand across the US.

Bird is a Californian startup that lets customers rent dockless electric scooters (or "birds") with the tap of an app then leave them on the street when they're done. It first launched in Santa Monica, a city in Los Angeles County, in September 2017 - sparking disruption, hundreds of traffic stops, and a criminal complaint against the startup and its founder.

The startup has since expanded to a number of other neighbourhoods in Los Angeles and San Diego, and on Tuesday announced it has raised $15 million in venture capital funding led by Craft Ventures to fund its expansion throughout the US.

It currently has 50,000 active users, the company says, and has already seen 250,000 rides on its platform. (It isn't disclosing its valuation or revenues.) By the end of 2017, the startup aims to be in the region of 50 markets throughout the US, founder and CEO Travis VanderZanden told Business Insider.

But Bird's roll-out thus far hasn't been entirely smooth.

'I think ultimately we all agree Bird is a good thing for the city'

The first the mayor of Santa Monica heard of Bird's scooters was when VanderZanden sent him a message on LinkedIn after they had launched, The Washington Post previously reported, and the city has since filed a criminal complaint against the startup over its failure to obtain a permit.

"These scooters literally just began showing up on our streets last fall," Santa Monica director of policy Anuj Gupta, Santa Monica told the paper. "The challenge is that they decided to launch first and figure it out later."

Asked if he thinks Bird made mistakes with its launch, VanderZanden answered carefully: "Our approach is to work with cities very early on in the process, so we reached out, started a dialogue with Santa Monica the week we actually launched ... any time there's new innovation it's never clear exactly where you fit into the permitting and regulatory scheme."

He added: "I'm happy to say in the last month we've made a ton of progress working with the city of Santa Monica ... Santa Monica is an environmentally friendly city. I think ultimately we all agree Bird is a good thing for the city."

Dockless bikes have caused mayhem - but Bird argues it's different

Dockless bicycles booked via an app are growing fast in popularity, pushed by a new flock of transportation startups. They give city-goers a new, healthy, and environmentally friendly way to get around, advocates argue, and can be left wherever's convenient once the user is finished with them, ready for the next customer.

But their rapid proliferation has caused headaches for some cities, as they clutter up public spaces and sidewalks, making it harder for people to get around - particularly those with access needs or in wheelchairs.

VanderZanden argues that Bird's scooters are unlikely to cause many problems. This is because they're in use nearly constantly, he says, and are collected up by the company at the end of every day to be recharged before being redistributed to pre-arranged spots on private property.

A more pressing concern for the startup may be safety, with a reported 281 traffic stops, 97 citations, and eight accidents in Santa Monica throughout January 2018. The CEO said he wouldn't comment on the numbers, but pointed out that Bird will offer free helmets to users via its app. (Electric scooter users who ride their vehicles on the roads in California are required by law to wear a helmet. Bird has posted photos and videos to its Instagram account of people using its scooters on the roads without helmets.)

"On a percentage basis, we actually think Bird is one of the safest ways to get around town," he said.

There's a whole lot of ex-Uber and Lyft employees on the team

Bird's team is heavily comprised of former employees of on demand transportation firms like Lyft and Uber. VanderZanden served as the first COO of Lyft and the vice president of driver growth at Uber.

VP of operations Stephen Schnell previously worked at Lyft, as did head of growth Ryan Fujiu, and head of launch Ryan Hupfer. VP of corporate development Sean Sires previously worked for Uber.

With $15 million in their pocket, the team is hoping to bring their scooters to dozens more American cities throughout 2018 - just, don't call them scooters.

The CEO prefers the term "birds" for the vehicles, he explained: "We don't really like the word scooter, ... it's kind of used as a kids toy, almost. And what we have is almost like a mini Tesla ... it's a lot more sophisticated, and it's a great tool to move people around cities."
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