Bird Fleet Manager Program Sparks Controversy: Debt Trap or Revenue Opportunity Amid the Pandemic?

Recently,a report by OneZeroaccused Bird'sfleet manager programof "luring contract workers into debt" by requiring contractors to pay upfront fees to manage scooter fleets. The report said participating contractors were saddled with "thousands of dollars in scooter debt... plus repair costs and potential liability for accidents." The report also sparkedsharp commentary from Business Insider Germany, where lawyer Andreja Schneider-Dörr said participating fleet managers face "extremely high debt risks."

However, Smart Cities Dive's investigation found that this is not always the case—some fleet managers are taking the opportunity to achieve financial recovery during the COVID-19 pandemic. Smart Cities Dive interviewed multiple fleet managers (all of whom requested anonymity due to confidentiality agreements in their contracts) and one applicant who refused to sign the contract. One fleet manager told Smart Cities Dive that the program is "fantastic." He said the working hours are intense—he hasn't had a day off since July 1—but the income is substantial, earning between $2,000 and $5,000 per week.

"It has changed my fiancée's and my life. We have never made this much money in our lives," the fleet manager said. He and other fleet managers told Smart Cities Dive that those struggling in the program likely haven't put in the necessary effort. "This job is a life-changing opportunity if people truly put in the time and have patience," he said. "I understand it's not for everyone... I think some people just don't want to do it, or lack work ethic."

Another fleet manager told Smart Cities Dive that his experience in the program has also been very lucrative. He echoed other comments, indicating the work is demanding and not something an average person without fleet management experience can handle.

In a recent filing with the U.S. Securities and Exchange Commission, Fidelity Investments disclosed that the value of its Bird investment has been written down by 17% this year, and according todot.LAreports, the company is currently "significantly scaling back." Bird calls its fleet manager program "a way to help local businesses and entrepreneurs get back to work in a socially distanced way," although Bird also promotes it as a means of managing its own device operations during the pandemic and economic crisis.

Recruitment process raises questions

The effort to recruit fleet managers has been supported by extensive marketing and Craigslist ads, but this recruitment process may be a source of criticism for the program, as questions arise about how Bird selects its managers. The program'sapplication formrequires interested participants to provide basic information, including name, phone number, location, and job availability—but lacks pre-screening criteria, raising concerns about the quality of applicants.

A trap for inexperienced contractors?

In late 2018, Bird launchedBird Platform, with the mission of empowering contractors to self-brand, price, and operate Bird scooters for just a "small fee."small fee. The program was promoted at the time as an opportunity for Bird to remove barriers of the traditional scooter-sharing model and enable Bird to leverage competitive advantages, as seen in Chicago, where Bird and Platform operator Sherpa in 2019both received pilot contracts。

After a while, Platform's momentum faded, until the COVID-19 pandemic hit and Bird began quietly recruiting for its fleet manager program—which OneZero reported is similar to Platform's "franchise model." Bird told Smart Cities Dive that its fleet manager program is not a franchise model, "as some have inaccurately described," because managers do not own or personally finance the vehicles. However, when asked about its recruitment process, Bird shared a list of applicant requirements that are similar to those for franchisees, including having a business license and sufficient space to store dozens of vehicles.

Bird also said the number of fleet managers it employs "varies by market and the size of our fleet in that market," but did not disclose the exact number of managers who have joined since the program's launch.

A Lime scooter charger in Chicago told Smart Cities Dive that he applied to the program to earn extra money, but backed out after seeing the contract. The source said he went through an interview process that offered "salesman-style pitches." "They intended to recruit anyone," he said, suggesting the company was looking for amateur candidates. "They told me they would train me on how to repair... and that there were people in the area who could come help if I had issues." The source also said the company assigned each fleet manager a specific operating area in the city, which he felt was unfair to managers assigned to less desirable areas.

Bird told Smart Cities Dive that while it "values diversity among fleet managers," it prioritizes a range of qualifications, including experience; infrastructure (i.e., having the means to collect scooters); availability; strategic thinking and problem-solving skills; and a passion for making communities "safer and cleaner." Bird also said its recruitment process "involves an in-depth, detailed explanation of payment logic and vehicle finances," and potential fleet managers must "demonstrate an understanding of the financial aspects to move forward in the process."

Richard Meneghello, a labor attorney at Fisher Phillips law firm based in Portland, Oregon, said this kind of "strategy" in arbitration translation is common in corporate practices, especially when working with contractors, to "minimize the likelihood of someone signing an agreement and arrangement without understanding its implications."

"There is a wealth of case law discussing... how to ensure this is an arm's-length business transaction, rather than (for lack of a better word) a company taking advantage of uninformed consumers," Meneghello said, noting that organizations typically remove "legalese" from contracts and detail agreements in "large bold font and plain English."

Smart Cities Dive obtained a copy of a Los Angeles fleet manager contract, which does contain clear bold language across 16 pages. The contract states that Bird retains ownership and title to all contracted vehicles in the program, and managers are responsible for "maintaining adequate insurance coverage." If electric scooters are banned in a manager's specific market for any reason, "Bird assumes no liability."

While the program's contracts vary by market, this contract includes a non-disparagement agreement and a "confidentiality" clause requiring all fleet managers to keep Bird's business, pricing, and technical information "strictly confidential" during the contract term and for three years after its expiration. Meneghello said such contractual agreements are less of a "red flag" and more typical of organizations, especially new businesses refining new programs.

"I especially see this in new businesses... They may want to extend this confidentiality so that, while they're working out the kinks and trying to get things right, people aren't scared off by potentially negative stories," Meneghello said.

Part of a larger industry trend

The controversy surrounding the program reflects a broader debate over the use of gig workers in the transportation industry. In California, ride-hailing giants Uber and Lyft successfullypushed for the passage of Proposition 22in early November, allowing companies to classify app-based drivers asindependent contractors, despite the state's AB 5 law requiring them to be reclassified as employees. These companies supported the controversial proposition to avoid paying hundreds of millions of dollars in annual payroll taxes and compensation costs, spendingover $200 millionon it. In anopinion piece written for TechCrunch, Uber software engineer Kurt Nelson opposed Proposition 22, calling it a "multi-million-dollar effort to strip these workers of their rights."

Due to the nature of scooter sharing, the micro-mobility industry relies heavily on contract workers for charging and rebalancing tasks—most notably through programs likeBird FlyerorLime Juicer. OneZero's report touched on these programs, claiming that Lime and Bird both "cut charger pay to historic lows" late last year. Lime said in a statement that its average payments to U.S. chargers have increased over the past few months. "Lime regularly makes small adjustments to a range of business inputs in every market we operate in, with the goal of providing reliable, affordable, and convenient transportation options for our riders. We have traditionally adjusted pricing seasonally based on rider demand and charger task volume," the company said.

Spin, a major competitor in the micro-mobility space, said providing workers with a living wage and benefits is "the right thing to do morally and safely." "As the industry matures, its practices must mature as well," a Spin spokesperson said. "By classifying local operations teams as employees, companies can establish reporting structures that ensure issues are resolved quickly and uniformly. As a transportation operator, it's essential to have uniform safety protocols in place to provide the safest ride experience for consumers."

Classifying contractors as employees can also have direct and ancillary benefits for operations, Kyla Hanaway-Quinlan, vice president of people and culture at Superpedestrian, said in anearlier interview. She said that when working with W2 employees, operators have "a higher degree of control over consistency and reliability," which is "more important than ever, especially in such uncertain economic times."

If contractors are interested in pursuing more opportunities like Bird's fleet manager program, Meneghello advises individuals to recognize that such programs "are different from some gig work where you sign up with no strings attached." "It's worth spending an hour or two with an attorney to make sure they understand the agreement before signing and are aware of all potential consequences," he said. "Recognize it for what it is and seek legal advice before signing."