San Francisco struck the biggest scooter-sharing company on Thursday and awarded two smaller startups exclusive rights to rent electric vehicles for a year to change the course of the emerging market.
The country's tech capital refusal allows 10 companies, including Bird Rides Inc. and Lime, to raise nearly $ 1 billion in capital to quickly populate cities with scooters – often against the will of the regulators. The ruling is a clear rebuke to their pugnacious strategy, with officials citing in part the aggressive movement of companies last spring to bring together more than 1,000 scooters on the streets of San Francisco before any rules can be set.
The city also rejected permits for ride-hailing companies Uber Technologies Inc. and Lyft Inc., which only recently jumped into scooter madness. Officials said earlier violations in their rideshare companies violated their claims.
Instead, San Francisco awarded the permits to two other startups, Scoot Networks and Skip Scooters, who together collected less than $ 50 million. Scoot already operates a joint electric Vespa-like scooter program in the city and a Bike Share program in Barcelona, while Skip in Washington, DC, and Oakland, California, offer common electric scooters.
While San Francisco is just one city, there could be spillover issues for the big scooter companies whose high-power investors see tremendous potential to re-shape urban transport. The sixteen-month-old Bird was recently valued at $ 2 billion by investors, and the $ 20 billion Lime was $ 1
Lime, a unit of Neutron Holdings Inc., has assembled a growing collection of cease and desist letters from cities. Many of these cities have similar scooter approval procedures to San Francisco, and urban transport officials say they have consulted with colleagues in other cities about scooters. Nevertheless, Bird and Lime both got a deferment on Thursday when Santa Monica, California, gave both companies two out of a total of four permits for a scooter program in the beach town, where the phenomenon in the US began low ratings for the applications Both companies, partly because of their tactics, to start against city rules. But both companies have started a strong PR campaign and promised improvements.
Uber and Lyft also received permits in Santa Monica. A Uber spokeswoman said granting two permits "would limit San Francisco's mobility options unnecessarily" and she would discuss her concerns with the city. A representative of Lyft could not be reached for a comment.
A spokeswoman for Bird said the company was disappointed with the decision in San Francisco, but hopes to return after the 12-month pilot. Lime CEO Toby Sun said in a statement that the company plans to attack the decision, the city's "selected inexperienced scooter operators who plan to study at work, at the expense of the public good."
Both companies say they are taking a collaborative approach with city administrations. San Francisco helped popularize the electric motor-driven, kick-like scooters that can be rented for a minimum of $ 1 each way via a smartphone, and can be picked up and left anywhere. After Bird, Lime and a third company, Spin, hit the market in March, they quickly became popular, filling the streets and sidewalks with scooters.
Investors nearby hurried to fund the companies and bet the scooters could steal businesses away from car hailing apps Uber and Lyft on short trips. Uber and Lyft responded by acquiring and jumping in their own shared bike-and-scooter companies.
But controversy broke out on drivers on sidewalks and the mess created by parked scooters. San Francisco officials seized hundreds of scooters and promised an approval program that would limit the number of vehicles while better managing park and safety issues.
On Thursday, city officials were muffled in their criticism of Bird and Lime. Tom Maguire, director of sustainable roads at the San Francisco Municipal Transportation Agency, said earlier violations were "an important factor" in assessing the 12 companies that applied for the city. In the end, he said, "There were two very clearly superior applications" that were judged on other issues, such as security concerns and offers for low-income residents.
Each company may drive 625 scooters in the first six months; while the total after 2500 can be increased from 1,250.
-Greg Bensinger contributed to this article.