In San Francisco, the dockless scooters that once covered the city's streets and sidewalks are finally back on a hot dog stand.
The San Francisco Municipal Transportation Agency (SFMTA), which banned joint electric scooters a few months ago, announced on Thursday the details of a one-year scooter pilot program.
But while numerous startups and tech giants, including Uber and Lyft, vied for the coveted permits to bring their bikes back to San Francisco, only two scooter companies get the green light: scoot and spin.
Starting in October, the startups will roll out a total of 1,250 electric scooters that the San Francisco can unlock with their smartphones and drive into the city. Companies can increase the number of scooters to 2,500 each after the first seven months of the pilot program. During this time, the city will look closely to decide on the future of the scooter segment.
The SFMTA's decision is a heavy blow to Uber and Lyft, who have applied for both San Francisco scooter license and Bird, the fiery scooter startup, which is funding it to a whopping 2 Billions of dollars estimate increased. Its investors have frequently attributed the Los Angeles-based company Bird to the invention of the scooter-share phenomenon last year.
Read more: Top Silicon Valley investors explain why an electric scooter startup is $ 400 million in 4 months "awesome" and worth every penny
The transit authority reviews 12 applications and more than 800 pages of proposals before a decision. According to a statement, the SFMTA acknowledged concerns regarding security, access for disabled and low-income residents, and accountability.
That Uber and Lyft were passed over for permits is not entirely surprising given the controversial history between them and the city. About six years ago, the companies driving by car started on the streets and sidewalks of the city without being approved by the local authorities. This is a precedent for scooter startups to do the same.
In March, three companies – Bird, Lime, and Spin – loaded hundreds of scooters across San Francisco before they had operating permits. According to the SFMTA, between April 11 and May 23, residents sent nearly 1,900 calls to the city's customer service center to complain about wheelchairs blocking access for pedestrians and users driving in public access ,
To address these issues, the city started charging scooters before the Board of Supervisors unanimously passed a new law requiring that any scooter startup have permission from the SFMTA to function.
It was not clear on Thursday whether the agency would grant more permits to companies like Uber, Lyft and Bird before the one-year scooter pilot program runs.
The decision is a serious blow to Uber, whose CEO recently advocated the development of joint scooter and bicycle services as key to the company's future.
"During rush hour it is very inefficient for a ton of metal to take a person 10 blocks," said Dara Khosrowshahi CEO of the Financial Times this month. "We are able to design the behavior in such a way that it is a profit for the user, it is a gain for the city."
"In the short term, financially, maybe it's not a win for us, but strategically, in the long term, we think we want to go there," he said.
Other unsuccessful candidates include Hopr, Jump (who owns Uber), Lime, Ofo, Razor, Ridecell, Spin and Uscooters.
Skip was an outsider who went into the approval process. The start-up launched its first scooters in Washington DC after working closely with legislators to issue regulations that would allow it to function.
According to the company, Skip was the first startup in the country with a joint, dockless scooter permit. The careful start was worth it.
Sanjay Dastor, CEO of Skip, told Business Insider in May that he prefers to work with cities instead of asking for forgiveness.
"We are the only company without cease and desist order," Dastor said after SFMTA kicked the trunk in May. "So, if you want to decide who you work with and who will choose the scooters that are right for the city and who has the right attitude to work with the authorities, I would say that we are the best choice."