Prominent scooter startups locked out of San Francisco

A Lime dockless electric scooter parked on a Wilshire Boulevard sidewalk on July 9, 2018.
A Lime dockless electric scooter parked on a Wilshire Boulevard sidewalk on July 9, 2018. PHOTO: AFP

NEW YORK (BLOOMBERG) - San Francisco chose startups Scoot Networks and Skip from the pool of 12 companies hoping to participate in the city's scooter-sharing pilot programme, bypassing Bird Rides and Lime - the two better-known operators most responsible for the trend of the electric vehicles buzzing along nation's streets and sidewalks.

Those companies had more luck, though, in Santa Monica, California, which also announced the parameters of its own scooter programme on Thursday (Aug 30).

In San Francisco, both Scoot and Skip will be authorised to put as many as 625 scooters on the road for six months starting on Oct 15, the city's Municipal Transportation Agency said on Thursday in a statement. The agency may let the companies put out as many as 2,500 scooters after the first six months of the one-year test, it said.

Ride-hailing giants Uber Technologies and Lyft were among the companies rejected by the transportation authority for the scooter-sharing programme.

Both companies have revealed plans in recent months to add bike- and scooter-sharing services to their ride-hailing apps, but have not yet launched scooters in any cities.

Bloomberg News reported on Thursday that Uber has begun work to engineer its own scooter to distinguish itself from competitors who mostly use white-labeled units from Chinese manufacturers.

The rejection from their hometown was a blow, especially for Uber, which already operates a bike-sharing service in San Francisco through Jump Bikes, a startup it bought in April.

Also on Thursday, officials in Santa Monica, California, announced that Bird, Lime, Uber and Lyft would be given permits to operate in that city's scooter-share pilot project. Bird and Lime each will be allowed to distribute 750 scooters, while Uber and Lyft can each distribute 250, beginning on Sept 17.

Santa Monica also granted permits to Uber and Lyft to put 500 bikes on the streets as part of a bike-sharing service also beginning that same day.

The fortunes of any scooter company do not rest completely on the decision of a single city. Bird operates scooter services in about 40 cities, and Lime is in about two dozen.

There is a lot of hype - and cash - on the line.

Bird kicked off the frenzy about a year ago, with its wildly popular service that allows customers to locate scooters on city sidewalks, rent them for a short ride and then leave them anywhere. Lime, which was initially focused on bicycles, soon followed. Both companies launched in San Francisco early this year along with a third, named Spin.

While the scooter companies all said they wanted to work with local governments, they were too impatient to coordinate their introductions with officials in most cities. That meant the ensuing blowback was all but inevitable. Santa Monica sued Bird, which settled and agreed to plead guilty to one local infraction. San Francisco's city attorney sent cease-and-desist letters to all three companies operating there in April.

The San Francisco Municipal Transportation Agency held those earlier disputes against the companies. In an itemised scorecard outlining the city's reasoning, Bird, Lime and Spin were given the lowest score for their history of complying with city regulations.

Earlier in this month, it looked as if Santa Monica was likely to reject Bird and Lime, as well. The city's selection committee rated Uber and Lyft's plans as far superior to all their competitors. Bird was rated 10th of 12 applications.

But in a memo explaining his decision, David Martin, the city's director of planning and community development, said that Bird and Lime's existing operations actually counted as a positive, because they would avoid gaps in service.

Martin also echoed a point made by Bird after the initial assessments were released: that there was a risk in granting control of the city's nascent scooter operations to companies that derived most of their revenue from automotive travel. Giving Uber and Lyft the only permits, he wrote, "would limit the potential of the programme by selecting two operators with a similar focus and an emphasis on ride-share".