You’ve likely seen or heard about the massive fleets of rental electric scooters that have been taking over US cities. Even if you don’t have the rental electric scooters in your city yet, you’ve probably seen the news coverage, especially regarding the backlash against riders dangerously and illegally zipping around sidewalks and crashing into pedestrians.

San Francisco decided to put a stop to the madness in their city last month, issuing cease and desist orders while they developed a plan to reign in the wild scooter companies.

Now they have offered five permits to electric scooter companies to operate in the city, and heavyweights Uber and Lyft have thrown their hats in the ring to face off against other already established electric scooter companies.

Dockless electric scooter companies Lime, Bird and Spin were the first movers in the rapidly expanding electric scooter rental industry. Over the last few months they have flooded San Francisco’s streets with hundreds, and by some counts thousands, of electric scooters.

The 15 mph (25 km/h) two-wheeled EVs can be rented with a smartphone and ridden for just a few dollars per trip. When the rider is finished with the scooter, he or she can park it anywhere for the next rider. They are actually pretty convenient little vehicles, and we reviewed the most popular model here on Electrek.

The method of transportation is quickly becoming popular in dense cities as an alternative not only to private cars and city buses, but also as an alternative to Uber and Lyft taxis, which is exactly why those companies want in on the action.

Uber and Lyft are already fierce competitors in the ride hailing industry, not only in the US but also internationally. But as the new wave of electric scooters begins to disrupt the transportation-as-a-service niche that they have dominated for years, both companies are rushing to grab their slice of the pie.

Uber recently spent $100M to purchase Jump, an electric bicycle sharing program similar to the electric scooter sharing programs offered by Bird, Spin and Lime.

Lyft revealed its own aspirations, reportedly attempting to acquire Motivate, the largest bike share company in the US, for a cool $250M. But competition never sleeps, and Uber is apparently trying to block the deal with their own offer to purchase Motivate.

With both companies buying up the assets they need to compete, the battle is now on in San Francisco. And it is turning into a 12-way battle royale, pitting large companies like Uber, Lyft, Spin, Bird and Lime up against less established players in the electric kickscooter rental field, such as Skip, Scoot, Ofo and Razor.

As the epicenter of the electric scooter wars, the decision in San Francisco is a make or break moment for some of these companies that have staked their profitability and thus their existence on gathering enough marketshare in big cities like San Francisco.

With San Francisco offering just five permits to electric scooter companies, these are essentially the five golden tickets. The game is afoot.

The San Francisco Municipal Transportation Agency (SFMTA) has required that scooter companies demonstrate a number of policies in order to be awarded one of the five coveted permits. These policies include demonstrating that the company will educate riders on the proper way to safely park the scooters (to keep them from becoming a public nuisance) as well as on the importance of wearing a helmet and not operating the scooters on sidewalks, which is illegal in most areas and is a danger to pedestrians.

The five permits for the SFMTA’s year-long electric scooter pilot program will allow each company to maintain a fleet of 250 scooters in the city for a total of 1,250 scooters citywide. If things go well after six months, the program allows for a potential doubling of fleets to a total of 2,500 scooters at the discretion of the the SFMTA.

Electrek’s Take

This is a big deal.

Look, these electric scooters are here to stay. They are just too convenient to fail. And for every self-conscious naysayer that mocks them for looking ‘dorky’, there are three more people behind him that will gladly fork over a couple bucks to cross the city in minutes instead of sitting in traffic making awkward conversation with an Uber driver.

When San Francisco kicked all the scooter companies off the street during the permit application process, people who missed the scooters began buying their own private scooters of the same model used by most of the major players, the Xiaomi M365 ($499). That’s how much people love these things.

And by playing musical chairs with these scooter companies, San Francisco is going to have a big hand in deciding which companies succeed and gobble up the most market share. Twelve competing electric scooter companies is obviously too many to be sustainable in any city. But can five work? San Francisco will show us.

The SFMTA’s pilot program is also likely to set a precedent for how other cities react to electric scooter invasions. So far, the business model for most of the companies has been to rollout overnight in a city, swarm the streets with scooters, then ask the city officials for forgiveness and legal status.

But that rarely goes smoothly. Lime, Spin and Bird have all received cease and desist letters from cities like SF, Nashville, Charlotte, Denver, Austin and even Honolulu. You have to try real hard to ruffle feathers in Honolulu.

If more cities adopt this permit model that requires the companies to demonstrate good behavior and sensible policies, we could see a much tamer, reasonable rollout in other cities in the future. And with the massive public backlash to what are otherwise really awesome scooters, better behaved electric scooters companies will be better for everyone.

 

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