VOL. 133 | NO. 121 | Monday, June 18, 2018
Bird Scooter Deal on Cutting Edge of Memphis’ ‘Demand Economy’
By Bill Dries
Standing beside two electric scooters in Court Square last week, Memphis City Council member Kemp Conrad quoted Sun Tzu, author of the ancient Chinese military strategy tome “The Art of War.” “Opportunities are multiplied as they are seen,” he said in quoting the favorite military tactician of 21st-century American business leaders.
The launch of a second “shared mobility” service in the city in three weeks – Bird electric scooters – is about more than the Venice, California, startup choosing Memphis, Conrad said.
“We think it is really about Memphis being an innovative, nimble and busy, friendly city characterized by its team approach to getting things done,” he added.
Memphis City Council member Kemp Conrad and council chairman Berlin Boyd take a pair of electric scooters were a drive around Court Square Thursday, June 14, the day before the Bird scooter system was to make its debut at several locations in the city. (Daily News/Bill Dries)
He also talked of a “demand economy” that includes not only Explore Bike Share – the bike-sharing system launched three weeks earlier, also in Court Square – but also ride-sharing services Uber and Lyft and vacation-rental platform Airbnb.
The city crafted ordinances to regulate both ride-sharing services and Airbnb rentals, and is the first city in Tennessee to collect taxes on Airbnb.
Conrad, who pushed for Bird’s entry into the Memphis market – the 15th city for the startup – said Memphians who rented out their homes on a short-term basis via Airbnb made $7 million in 2017, or about $8,000 per host.
“That’s a real number,” he said of a larger goal to “harvest this demand economy.”
For now, Bird is doing business under a temporary operating agreement with the city. That is to be replaced with a “shared mobility ordinance” City Council members get their first look at during committee sessions Tuesday, June 19. If passed on three readings, the ordinance would also apply to Explore Bike Share.
“It says we will have regulations and you must follow the regulations. You have to indemnify the city and all of its partners from any accidents that might happen,” said city chief operating officer Doug McGowen. “It sets out some of the basic things you would expect. It basically tells some of the companies that are in the e-bike and shared mobility space that they need to follow the regulations. … We’re not trying to limit anybody from doing something. We are just trying to set out some of the basic rules.”
Beyond that, the city is avoiding caps on scooters set in other cities.
“We want it to be demand-driven. It needs to be what’s best for Memphians,” McGowen said. “So if Memphians are using this and want it – we don’t want (Bird) to flood the city and just drop 1,000 scooters around town. So, as an example, it might be that once a scooter hits two or three rides a day then we’ll add more.”
City Council chairman Berlin Boyd zips past the Court Square fountain last week in a preview of the Bird electric scooters system that made its debut. (Daily News/ Bill Dries)
The deal for Bird was done in a week’s time, Conrad said – recommended by the lobbying firm Ingram Group, which represents both Bird and the city of Memphis.
“We’re on the cutting edge of it,” he said. “There were a lot of cities that were vying for this. We had the opportunity to act quickly.”
Conrad and the city administration were already working on a shared mobility ordinance before Ingram pitched the idea. The day after the pitch, the wheels were turning and talks were underway at City Hall this past Tuesday.
“We seized this opportunity in a week,” Conrad said. “A lot of homework went into making this happen.”
Memphis’ involvement comes after some complaints in other cities about the scooters being left to block public sidewalks. The company has responded with a pledge here and in other cities where it operates to round up all of its vehicles at night for charging and maintenance.
That is to be done by a group of people paid per scooter that Bird officials were talking with Thursday as the announcement of the “shared mobility” service was being made by city leaders.
Meanwhile, The Financial Times reported this week that Bird is raising $300 million in new funding through venture capital firm Sequoia Capital that would put the value of the company at $2 billion.
Bird’s Memphis operations are starting with a fleet of 200 scooters in Cooper-Young, Midtown, Downtown, South City and Uptown.
The agreement includes $1 per scooter per day going to the city to build more bike lanes and infrastructure as well as promote safe riding. The city puts out no money for the venture.
The scooters, which are activated through an app, cost a base fee of $1 per ride, plus 15 cents a minute.
The scooters travel at about 15 miles an hour. Signing up for the app includes the option of getting a free helmet. Helmets are not required by Tennessee law but are recommended by the company.