Earlier this year, in a handful of cities along America’s West Coast, droves of electric scooters descended on busy streets with little to no warning.
It wasn’t just consumers who were surprised — some pleasantly so, others not so much. Local governments, too, were forced to scramble to understand and regulate this yet-unseen form of shared transportation.
The startups that put them there, Bird and Lime, employed a tried and true playbook, written a few years back by fast-growing ride-hail firms Uber and Lyft, as well as Airbnb: Launch your service in a city without permission, become wildly popular with consumers, and then ask for forgiveness when regulators try to throw you out. When that doesn’t work, send in your adoring customers to fight for it. Oh, and a handful of lobbyists. Don’t forget the lobbyists.
In Santa Monica, Calif., the scooter companies are in the midst of one of the first real tests of this strategy. The city is expected to announce today (Aug. 30) which companies will receive a permit to operate scooter-sharing services there. The others will not be allowed to operate for 16 months.
San Francisco, too, is expected to finally announce this week which companies will be awarded permits to operate during a 12-month pilot, after a similar situation there with Bird and Lime.
In Santa Monica, at least, early results look bad for Bird and Lime, the “pioneer” startups that spattered the seaside city and neighboring Venice with hundreds of scooters without permission.
After considering permit applications from 18 companies, the city government recommended that two rivals — Uber and Lyft — become the sole providers of scooter and bike-sharing there. Neither operates scooters in any market yet.
Bird and Lime’s immediate reaction was to shut down their scooters in protest and call on their users to rally outside City Hall. (Complicating the situation, Bird is a local startup that says it will soon employ 1,000 people at its Santa Monica headquarters. The year-and-a-half-old company has used its early success to raise more than $400 million in financing.) Users sent in 10,000 pre-written emails asking council members not to “ban” Bird and Lime scooters. Bird even bought Facebook advertisements attempting to activate its most loyal users.
Elsewhere, as Bird expands across the country — working with Uber’s former external policy shop, Tusk Ventures — part of its calculus includes the risks of regulatory blowback. In places like Milwaukee, for example, the company launched its scooters without permission but later began working with the city to find ways to legally introduce the service.
It’s a bare-knuckles move straight from the Uber playbook. But it may prove to be the wrong one this time.
Both Bird and Lime seem to be wising up to the limitations of the scorch-the-earth strategy. After throwing what some city staffers reportedly described as a tantrum, the companies are now emphasizing commitments to collaborate with Santa Monica.
Bird, for example, submitted a more than 130-page document that put a spotlight on the purported environmental benefits of electric scooters and a commitment to safety and increasing economic opportunity. The company also added additional plans to incorporate low-income riders, as well as proposals to reduce fares that start at transit lines.
“The best partner for Santa Monica’s Shared Mobility Pilot Program is a company headquartered here in the community, whose employees live, shop, and raise families here — a company whose leaders you can call and they will walk down the street to attend meetings with you,” it reads.
Lime committed $1.5 million to improving Santa Monica infrastructure, like bike lanes.
Have more information or any tips? Johana Bhuiyan is the senior transportation editor at Recode and can be reached at email@example.com or on Signal, Confide, WeChat or Telegram at 516-233-8877. You can also find her on Twitter at @JmBooyah.
Planning Director David Martin will be left to consider the city council’s recommendation — and to decide whether Bird and Lime will be allowed to continue to operate there or be left out — in the context of these late-in-the-game commitments.
Why are things different now? What has changed since the Uber land grab? Why do cities have the upper hand this time around?
For one, many cities are better equipped to deal with invasive tech species like scooters, given this is their second go-around with free-wheeling tech companies. Within weeks, cities like San Francisco and Santa Monica responded methodically to the unregulated launches of scooter-sharing services. They delivered cease-and-desist orders and launched extensive permitting processes, requiring in-depth but practical plans for companies to deliver on their many pitches.
It also helps that many cities have already been through some of this with bike sharing, which has mostly emerged in the U.S. through exclusive partnerships with an operating company called Motivate, recently acquired by Lyft.
But scooter-sharing companies also just don’t have as much leverage as Uber and Lyft did.
The ride-hail companies pitched themselves as saviors, taking on the so-called villainous, monopolistic taxi companies, which overcharged for their services, drove dirty cars and were inconvenient or impossible to use in many locations.
Uber and Lyft provided a service that, in some places, profoundly changed the urban experience. This made it easier to activate consumer evangelists. The companies also pitched themselves as a viable and easy-to-access source of income for drivers. There are some jobs for the scooter companies, but they’re different.
Scooters, on the other hand, have been polarizing from the get-go. Though the companies have pleased many micro-transit enthusiasts, others see them as toys or trash strewn on sidewalks. They also don’t provide the same level of convenience at the scale that ride-hail did. You can’t take a Bird scooter to the airport, or across town in a snowstorm.
Cities are also not instating an outright ban on scooters — regulators are simply being selective about which companies will operate those scooters. And governments, like Santa Monica’s, are using their power to demand compliance, collaboration and a commitment to equitable access to transportation — not just in their cities, but everywhere.
Having watched Uber and Airbnb grow around the world, these lawmakers are under no illusions that a non-compliant company in one city will magically be compliant in theirs. Santa Monica’s scooter permit process, for example, included a scorecard, where companies were judged on how well they comply with local, federal and other laws.
Bird scored among the lowest.
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