Bird is scrapping thousands of e-scooters in the Middle East and shutting down its operations in the majority of the region as a result of the coronavirus pandemic, according to five people familiar with the matter.
The e-scooters being scrapped belong to Circ, which was acquired by Bird for an undisclosed sum in January.
There are between 8,000 and 10,000 Circ scooters across cities in Qatar, Bahrain and United Arab Emirates, according to one former employee and one current employee for Circ who asked to be kept anonymous as they’ve signed a confidentiality agreement.
Bird is paying around $300,000 to have all of Circ’s scooters in the Middle East scrapped, the former employee told CNBC.
Bird said it has “temporarily paused operations” in the Middle East because of the hot weather, adding that it is using the break to “recycle” some vehicles. Bird will continue to operate its own scooters in Tel Aviv.
“During this pause, we are taking the opportunity to responsibly recycle parts of the old Circ fleet that were previously used in the region,” a Bird spokesperson said.
“Following extreme wear and tear, the Circ vehicles no longer met our rigorous quality standards. Selling or re-use of these vehicles would potentially result in safety and reliability issues, which would not have been fair or ethical to the purchasers or potential riders. We look forward to resuming our service throughout more parts of the region later this year.”
On March 27, Bird laid off around 30% of its workforce on a Zoom call, or 406 people out of 1,387 employees prior to the layoffs.
The entire Circ team in the Middle East, which comprised of around 75 people, was laid off that day and many of them had their last day on May 31, according to the former employee and two other industry sources who preferred to remain anonymous due to the sensitivity of the situation.
“They’re completely shutting down the operation,” said the former employee. “They’ve pulled out and closed the Middle East. Everyone is unemployed.”
“They (Bird) hung around after acquiring Circ and said they were backing us because we had 70% market share out here and we were in a very good position. Obviously Covid came in and they decided they didn’t want to do it anymore. We were expecting pay cuts because it was a bad time with obviously no operation but then they turned around and made everyone redundant.”
Hot on the heels of Uber Jump
Governments are throwing their weight behind e-scooters and e-bikes as a viable alternative to cars and public transport in the age of the coronavirus.
E-scooter sharing companies have marketed themselves as sustainable, environmentally-friendly businesses that cut carbon emissions. But there have been questions about the longevity of their vehicles, with reports suggesting some Bird e-scooters have a life span of just a few months.
Last week, it emerged that Uber is scrapping thousands of e-bikes and e-scooters worth millions of dollars after selling its Jump unit to mobility start-up Lime.
The firm said it decided to “recycle” the older models that Lime didn’t want after concluding that it would be too complicated to give them away due to the maintenance and technical support that they need.
Lawrence Leuschner, the co-founder and CEO of Berlin scooter company Tier, told CNBC that he has offered to take the scooters from Uber Jump and Bird but neither of the companies took him up on the offer.
Frank Meehan, co-founder of environmental start-up Equilibrium, wrote on Twitter: “Some bike and scooter sharing companies have to be some of the worst environmental polluters of the last decade, and have been really irresponsible.”
Correction: A quote in this story has been updated to show that Circ had a 70% share of the market in the Middle East.