Operating Costs

• In 2019, Lime was expected to post an operating loss of over $300 million. This is against a gross revenue of $400 million. Despite solid growth, there are still questions about whether their model of business is sustainable.
• Bird had similar results recording a $100 million loss against revenue of $15 million in the first quarter of 2019, although admittedly write-offs and seasonality played a role in this.
• It was reported Lime told investors in July, "it spent about 35% of gross revenue on depreciation, 40% on local operations, and 17% on charging. Other smaller costs include payment processing, customer support, and insurance."
• Both Bird and Lime have struggled to cover the costs of vandalism and depreciation of their scooters. The average lifespan of the scooters is two months.
• The small battery size and low electricity costs mean that the average bike costs less than $0.10 per charge. As the quality of the bikes improves, maintenance costs should fall to around $0.19 per mile. Extending the life of the bike to a year will yield $0.24 in savings per mile. If the lifespan were to decrease to one month, the cost per mile would increase to $4.40.
• Quartz has estimated the average lifespan of a scooter to be just 28.8 days. Bird needs five rides per day at the cost of $5.25 per ride to recover the cost of purchasing the scooter. The average trip is 18 minutes. The scooters average 3.49 rides per day. This means each scooter makes $12.91 in revenue per day.
• The cost breakdown includes charging costs of $1.42 per ride, repairs of $0.51 per ride, credit card fees $0.41 per ride, customer support $0.06 per ride, and insurance $0.05 per ride. This adds up to costs of $2.75 per ride.
• In addition to these costs, some cities require the company to pay a probationary license fee, along with additional licensing costs, cities charge a fee for the docking stations, each vehicle, and per designated group parking area.

Summary

• In our first hour of research, we have found some details around the operating costs of bike rental operators in North America. There appears to be a considerable amount of data available that provides details of not only costs but some of the difficulties associated with the business model that Lime and Bird have adopted.