E-Scooter Rental Companies ‘Take A Page from Uber’s Playbook’ to Muscle Their Way into Cities
Electric scooter rental companies, armed with lobbyists and millions in venture capital, are overwhelming local governments in an effort to elbow their way onto the sidewalks and streets of cities across America.
Aaron Peskin, a member of San Francisco's board of supervisors, knew that "Scooter-geddon" was coming.
He had watched hot e-scooter rental startups like Bird, LimeBike, and Spin wreak havoc in Southern California as riders illegally sped on sidewalks, obstructed building entrances, and caused at least one bone-breaking accident. So in early March, Peskin drafted legislation that would force e-scooters to apply for permits from San Francisco's Metropolitan Transportation Agency before launching.
He wasn't fast enough.
LimeBike, Bird Rides, and Spin launched about 10 days later--before the city could implement a permit program--deploying 4,000 e-scooters to the streets and sidewalks of San Francisco. Almost immediately, what some have called the "Great Scooter War of 2018" took hold of the South of Market and Financial District neighborhoods. The city seethed as riders zipped around without helmets on the sidewalks, or crowded two people onto one scooter. The hashtag #ScootersBehavingBadly became a thing.
Now, Peskin and other officials are calling the scooter companies the newest reincarnation of the "entitled" tech elites who launched in a similar "go-fast-and-break-things" fashion a few years back. "There is no question that Bird, Lime, and Spin took a page [from the] playbook of the arrogant tech barons Uber and Lyft," says Peskin, calling it an "ask for forgiveness rather than permission" approach.
Whether the startups are purposely emulating Uber and Lyft is debatable. (For their part, all three startups say they have followed all applicable laws and want to collaborate with the local governments.) But one thing is for certain: Armed with lobbyists and millions in venture capital, LimeBike, Bird, and Spin have flooded multiple cities with a new, unregulated technology and succeeded -- to an extent -- in elbowing their way onto the sidewalks and streets of cities across America.
A Tumultuous Start
While the scooter war is just hitting San Francisco, battles have already been fought in Los Angeles, San Diego, Austin, and Washington, D.C.. After a few months of chaos in L.A., Bird agreed to pay $300,000 to settle a nine-count misdemeanor criminal complaint. In Austin, Texas, both Bird and LimeBike have pulled their scooters at the city's request but expect to be back soon as they await permits. There was less commotion in Washington, D.C., where LimeBike and others launched; the city implemented a permit program that caps each company at 400 e-bikes or scooters.
While most new businesses would probably be no match for local governments, electric scooter startups represent more of a threat. In general, disruptive companies like Uber and Airbnb are able to expand at an explosive clip because cities are simply not able to implement rules and regulations fast enough to keep pace with new technologies. With an arsenal of cash and marketing prowess, the e-scooter startups seem to be penetrating markets, laying roots, and winning over a certain demographic of consumers. Bird, for instance, recently recorded over 1 million rides.
And they're hiring lobbyists -- something Uber, in particular, is known for doing. In what Quartz called "the most spectacular political coup," Uber successfully lobbied to get ride-sharing friendly legislation passed in over half of all U.S. states between 2014 and 2015. Last year, Uber spent over $1.8 million in lobbying.
In California, Bird's lobbyist approached Assemblyman Heath Flora this spring to sponsor a bill, AB2989, which would make it legal to drive e-scooters on the sidewalk when there isn't a bike lane available, according to Lucas Webster, a Flora aide.
Like the other startups, Bird paints itself as an alternative transportation option that could help reduce car traffic, replace ride-sharing, and become a "last mile solution" for small distance commuting.
"If you choose against scooters, than you choose cars," says David Estrada, Bird's chief legal officer, who was formerly the vice president of government relations at Lyft. (Bird was founded by Travis VanderZanden, who was an executive at both Lyft and Uber.)
That stance is precisely what is angering some officials and pedestrian advocates.
At a Municipal Transportation Agency meeting this week in San Francisco, a concerned citizen named Andy Blue suggested that the city should refuse permits to Bird, Spin, and Lime due to their "breathtaking arrogance" and for pushing their way into public spaces across the city with little-to-no warning and limited-to-no community engagement.
"Where have I heard this before? Oh, yeah, Uber. The company that did the same thing exactly seven years ago when it ambushed our city with the same model," says Blue. "Remember how we had to accept them with no conditions because they were going to relieve the congestion on our streets? Here we are seven years later with 30 percent more cars on the streets because of Uber and Lyft."
A Call for 'Common-Sense' Rules
When asked about the comparison to Uber's "ask-for-forgiveness" strategy, Bird spokesman Kenneth Baer noted that the company started conversations with city officials before launch and followed all applicable laws. (Those conversations were cut short once Lime launched in San Francisco, says Estrada, which forced Bird to launch.)
"The general idea that companies must 'ask for permission' from government entities before offering products and services to consumers is inconsistent with our system of law and free enterprise," Baer says. "We understand this is a new technology and in some cities the regulations haven't kept up with technology. That's why we're working with cities to develop new frameworks that work well for everyone."
Jack Song, a spokesman for LimeBike, didn't respond directly about the comparison with Uber, only saying the company views San Francisco as a partner in its efforts to ease the city's congestion. He noted that LimeBike's launch was a limited pop-up program that was fundamentally different than its rivals. "Our competitors used our limited rollout as a pretext to blanket the city with scooters, creating the chaotic situation that ensued," he says.
Spin, meanwhile, says it "strongly" disagrees with the characterization. "We've been engaging with city officials since February and were the only ones to reach out and brief them proactively before there was any legislation or deployment," says Euwyn Poon, Spin's co-founder and president. "We've always supported common-sense rules to protect the public."
Whether e-scooters will become as commonplace and accepted as ride-share vehicles remains to be seen.
In San Francisco, the companies are making some progress. Back in April, at the height of the scooter mania, San Francisco City Attorney Dennis Herrera sent Bird, LimeBike, and Spin cease-and-desist letters, alleging they created a "public nuisance" because customers were violating state and local laws as a "direct consequence" of the companies' business models. The Department of Public Works impounded hundreds of e-scooters parked illegally on the sidewalk.
But this past week, the San Francisco MTA voted to approve a one-year pilot permit program, as long as the companies apply and pay a $5,000 application fee, plus a $25,000 annual fee if approved. The city will only award five permits and ultimately cap the total number of scooters at 2,500. There are currently 4,000 scooters in San Francisco. City supervisors said they would take a company's past behavior into consideration when awarding permits.
Still, Peskin says city officials are now united to uphold the interests of the city over the newest tech craze. He is still bristling over the hundreds of automated emails that Bird users send each week through the mobile app, supporting the company's reported cause to reduce traffic (a strategy also compared to Uber's). "It's part of their shock-and-awe campaign," he says. The rhetoric that came from the ride-share startups about reducing congestion "is now coming from Bird, Lime, and Spin," he says. "They are here to help with the 'last mile solution' of transportation and it's not turning out to be true, either."