The city of San Francisco awarded two operating permits for electric scooter sharing companies last month. Lime, one of the two largest electric scooter sharing companies, was denied.
Now the company is filing an 11th hour court motion to block anyone from operating electric scooters in the city.
Lime’s role in the electric scooter wars
The saga began after electric scooter sharing companies such as Lime and Bird inundated San Francisco with thousands of electric scooters last year.
The electric scooters were designed to solve urban transportation problems by creating an inexpensive, convenient form of personal electric transportation. The scooters are spread around cities, no dock needed, where they can be rented for just $1 plus 15 cents per minute by anyone with a smartphone.
However, trouble began almost instantly in San Francisco due to a lack of regulations regarding the scooters. Riders were running into pedestrians on the sidewalks and scooters were strewn around public walkways, creating a nuisance.
The city kicked out Lime, Bird and other scooter operators while they ran an application process to award new permits based on companies’ merits. The San Francisco Municipal Transport Agency (SFMTA) ultimately chose the relatively newer companies of Scoot and Skip, with Bird and Lime scoring lower due to a history of regulatory ambivalence.
Now Scoot and Skip are expected to begin operations in San Francisco on Monday, but Lime is trying to stop them.
According to Lime:
“Lime believes that after selecting two other less experienced electric scooter companies and comparatively weaker applications in a process that was riddled with bias, the SFMTA should revisit the decision and employ a fair selection process.”
Scoot has already been operating electric moped-style scooters in San Francisco for years, long before Lime was founded.
Skip, unlike Lime, pledged not to enter new markets without first receiving permission from the city. Thus, Skip is not operating in as many cities as Lime. However, Skip is currently operating in Portland, Long Beach and Washington D.C. with the blessing of those cities.
San Francisco is not buying Lime’s last-minute move. As reported by TechCrunch, communications director for City Attorney Dennis Herrera said in a statement:
“It’s unfortunate Lime has chosen this course. The SFMTA’s permitting process for the pilot program was thoughtful, fair and transparent. It includes an appeal process that Lime should be pursuing instead of wasting everyone’s resources by running to court.
Lime appears to be playing games. It had weeks to resolve this and instead chose a last-minute motion in an effort to shut down the entire scooter program. Lime fails to admit that its application simply didn’t match those of its competitors. If Lime succeeds, it will be hurting the very people it purports to want to help – those who are ready to use scooters on Monday.
Last spring, Lime told San Franciscans that electric scooters were a great transportation alternative. Now, Lime is saying that if they can’t run electric scooters in San Francisco, no one can. It’s sour grapes from Lime, plain and simple.”
The move comes as Lime is aggressively expanding their operations into new markets, including recent North American expansions in Canada and Mexico. The company already operates electric scooters across a number of cities in Europe.
Lime appears to be doing everything it can to distinguish itself and grow into new markets, including their recent effort to go carbon neutral. With so many scooter companies competing for the same rider base, they are all feeling the same crunch.
Bird, Lime’s closest competitor, is reportedly worth a staggering $2B. Lime has also raised significant venture capital, but is still second behind Bird in valuation. Lime surely doesn’t want to miss any opportunity to grow, and San Francisco would be a massive opportunity – or missed opportunity – for the company.
It will be interesting to see if the city bends to Lime’s will. A similar case occurred in Santa Monica, when Bird and Lime were also passed over for permits by the city. Instead, Santa Monica chose scooter shares operated by Lyft and Uber. However, Bird and Lime protested the city’s decision, eventually bullying the city into acquiescing. Let’s see if San Francisco bends as well.
One last interesting wrinkle in the whole scooter sharing equation is consumer buying attitudes towards the scooters. In the past, most people would have scoffed at the idea of adults on scooters. Now, companies like Bird and Lime have shown riders how convenient the little EVs are. Ever since, consumer sales of electric scooters have taken off. Amazon is having trouble keeping enough of the $400 vehicles stocked, and crazy models with 5x the power of Lime’s scooters are taking off.
One thing is for sure: riders are loving electric scooters, shared or otherwise.
[Update: October 13th, 12:19]:
The court ruled against Lime, allowing the scooter programs that were originally selected to begin operations on Monday.
Jack Song from Lime’s Communication Team emailed the following statement to Electrek:
“We consider today’s hearing a victory for the people of San Francisco and Lime.
The Honorable Harold E. Kahn voiced serious concerns about the San Francisco Municipal Transit Agency’s (SFMTA) permit process and ordered expedited discovery into the SFMTA’s selection process. In a rare move, the Judge ordered five key SFMTA officials and staff — including Director of Transportation Ed Reiskin himself — to testify next week. There will be another public hearing on this issue before Judge Kahn in mid-November, where the SFMTA will be required to answer to the people of San Francisco, and explain exactly what happened in the SFMTA’s biased selection process.
We look forward to having our preliminary injunction request heard in the coming days — to ensure that the people of San Francisco receive a transparent, fair and equitable process that best serves the entire City and County.
Our decision to file this lawsuit was not about preventing other operators from going forward; it was about exposing the biased and flawed process of the SFMTA, standing up for the rule of law, and serving Lime’s hometown.”