Electric Scooters Hit Regulatory Speed Bump in America

Electric Scooters Hit Regulatory Speed Bump in America

Scooters increasingly compete with skateboards and cycles as preferred ways to get around in towns across America.

SourceJason Henry/The New York Times/Redux

Why you should care

The explosion of these vehicles is testing regulatory mechanisms. 

A new wave of electric-scooter-rental startups is facing a legal reckoning, as city authorities across the U.S. race to tame the “dockless” two-wheelers that have flooded the streets. New regulations proposed in several cities could place a cap on the number of scooters a single company can operate, as regulators demand that fast-growing startups Bird, LimeBike and Spin do more to educate and police their customers about safety.

The companies have launched thousands of app-controlled, GPS-tracked electric scooters in San Francisco, Los Angeles, Austin and other U.S. cities, with riders able to pick them up and drop them off wherever they like. Fueled by hundreds of millions of dollars in venture capital, the startups are racing to launch in as many cities as quickly as possible.

“There is a very strong first-mover advantage,” says Brad Bao, co-founder of San Mateo–based LimeBike, which is looking to raise tens of millions of dollars in new funding.

In San Francisco, the department of public works has impounded more than 300 scooters it says were parked illegally over four days of street sweeps.

The tactics have invited comparison to another recent transportation revolution. When Uber and Lyft were starting out, they charged into new cities to seize market share, leaving local authorities scrambling to figure out how booking cars should be regulated. Even some tech investors have bemoaned the scooter companies’ tactics. “The ‘simply ask forgiveness’ playbook sure feels very 2014 and out of step with where we want our tech values to settle post-‘bro,’” Hunter Walk, of early-stage venture fund Homebrew, wrote in a blog post last week, referring to the “tech bro” moniker given to a more aggressive kind of geek.

Advocates for the services argue that nippy electric scooters provide an environmentally friendly and low-cost addition to local transport options, especially for short journeys. Many consumers seem to agree: Customers of Bird, which was first to launch an electric scooter service in Santa Monica seven months ago, have ridden more than 1 million miles.

“We try to go in [to cities] and be the nice guys,” says Bird founder Travis VanderZanden, who previously held senior positions at Uber and Lyft.

Nonetheless, the Los Angeles–based company and its rivals have made some enemies in the corridors of power.

“It is clear many of these companies continue to build their corporate empires off a basic premise: Making massive profits and innovation is only possible by cutting corners,” said Aaron Peskin, a supervisor in San Francisco, at a regular meeting of the city’s elected neighborhood officials recently.

Critics such as Peskin argue that the companies are exploiting legal loopholes to launch without cities’ authorization, and are creating a safety hazard. Too many riders are speeding along pavements instead of using roads or bike lanes, and abandoning their scooters in places where pedestrians risk tripping over them, they say.

In San Francisco, the department of public works has impounded more than 300 scooters it says were parked illegally over four days of street sweeps. LimeBike, Spin and Bird collectively have several hundred scooters in use in San Francisco and have each been asked to pay thousands of dollars in costs to recover their confiscated vehicles. San Francisco’s Municipal Transportation Agency is in the process of drawing up new regulations and hopes to begin issuing permits to scooter operators by mid-May.

While the debate over electric scooters has been most intense in San Francisco, other cities are grappling with the same issues. Austin City Council on Thursday approved a new ordinance that begins a permitting process for dockless bikes and scooters. The regime would limit each operator to 500 vehicles and require them to share usage data with the city so the number of permits issued could change depending on each company’s safety record and rate of utilization.

In the meantime, the startups have also increased their efforts at self-regulation.

Bird is testing a new feature that would have its users take a photo of where they leave the scooter when they end a ride, to discourage people from abandoning them in the wrong places. LimeBike has suggested using its ability to track customers’ smartphones via GPS to “ping” them to move a scooter that might be causing a hazard.

Anuj Gupta, Santa Monica’s deputy city manager and director of policy, recognizes the “initial surprise and a little bit of consternation” that San Francisco and Austin are experiencing. Santa Monica has been a pioneer in scooter-sharing since Bird launched there last year. But after Bird was fined $300,000 for operating without the proper license in February, Gupta says there has been “some real improvement.”

“There are far fewer scooter riders on the sidewalks,” he says, although he adds that helmet use remains too low.

“We’d still like to see more commitment and enhanced education by [Bird] to ensure their users are engaging in good, safe riding behavior,” Gupta says. “But it’s getting better.”

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By Tim Bradshaw

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