San Francisco made a blow to the biggest shared scooter companies on Thursday, awarding two minor startups exclusive rights to rent the electric vehicles for a year in a decision that can change the course of the growing market.
The nation's tech capital denied licenses to 10 companies, including Bird Rides Inc. and Lime, which has increased almost $ 1 billion in capital to quickly fill cities with scooters – often against the will of regulators. The height is a clear accusation against their pugnacious strategy, with officials referring in part to the company's aggressive moves during the spring, to release more than 1,000 scooters gathered on the streets of San Francisco before rules could be established.
The city also rejected licenses for ri-hailing companies Uber Technologies Inc. and Lift Inc., who just recently jumped into scooter mania. Officials said earlier violations in their ranch business damaged their applications.
Instead, San Francisco received licenses for two other launches, Scoot Networks and Skip Scooters, which together have increased less than $ 50 million. Scoot operates a shared electric Vespa-like scooter program in the city already and a bicycle sub program in Barcelona, while Skip offers shared electric scooters in Washington, DC and Oakland, California.
While San Francisco is just a city it can have spillover problems for the big scooter companies whose high-powered investors see huge potential for transforming urban transport. Sixteen-month-old Bird was recently valued by investors of $ 2 billion and 20-month-old Lime of $ 1
Bird and Lime, a unit of Neutron Holdings Inc., has racked up a growing collection of stop-and-desist letters from cities. Many of these cities continue with scooter-licensing processes similar to San Francisco, and city transport officials say they have consulted with colleagues in other cities about scooters.
Nevertheless, Bird and Lime both received a statement on Thursday when Santa Monica, California, gave both companies two of four total permissions for a scooter program in the beach town where the phenomenon began in the United States. A city re-evaluation committee had awarded low rankings to both companies' applications, partly because of their tactics to launch city rules. But both companies created a strong PR campaign and promised improvements.
Uber and Lyft were also granted licenses in Santa Monica. An uber spokeswoman said that they allowed two permissions "unnecessarily restrict mobility options in San Francisco," and it plans to discuss concerns with the city. A lift representative could not be reached for comments.
A bird spokesman said the company was disappointed with the San Francisco decision, but hopes to return after a 12-month pilot. Lime boss Toby Sun said in a statement the company plans to appeal the decision, adding to the city "selected inexperienced scooter operators who plan to learn at work at the expense of public good."
Both companies say they take a cooperative approach with the city's governments. San Francisco helped popularize the electric motor-powered, kick-like scooters, who rent for at least $ 1 a trip via a smartphone and can be picked up and left most anywhere. After Bird, Lime and a third company, Spin, were launched in March, they became quickly popular, fill streets and sidewalk with scooters.
Investors nearby stormed to fund the companies, and betting scooters could steal shops away from car-raising apps Uber and Lift on short trips. Uber and Lyft responded by acquiring own shared bicycle and scooter companies and jumping in.
But the controversy broke out over riders on the sidewalk and the root created by parked scooters. San Francisco officials caught hundreds of scooters and promised a licensing program intended to limit the number of vehicles while taking a closer grip on parking and safety issues.
On Thursday, officials in the city were muted in their criticism of Bird and Lime. Tom Maguire, Director of Sustainable Streets at San Francisco Municipal Transport Agency, said that earlier violations were "an important factor" in how the 12 companies that searched the city were evaluated. In the end, he said: "There were two very clearly superior applications", which were judged on other issues such as security issues and low-income housing offers.
Each company is allowed 625 scooters in the first six months; while the sum can be increased after 2500, from 1200.
-Greg Bensinger contributed to this article.