Say you had a big idea that might change the way people got around the American city. And you had a bunch of money to make it happen. Would you take it to the Department of Transportation and ask for a permit? Or would you just do it?
In their early years, Uber and its peers infamously took the latter strategy, operating semilegally or illegally until the laws changed to accommodate them. Today, in America’s largest cities, Uber, Lyft, and their ilk are so thoroughly woven into the fabric of urban life it’s hard to imagine life without them.
If you were looking for a counterexample—say, a group of companies that tried the Uber playbook but eventually gave in to municipal regulatory power—you’ve got one in companies that provide super cheap transportation on freestanding scooters and bicycles. Some, like Santa Monica–based scooter company Bird, tried the Uber route by putting hundreds of vehicles on the streets of the city. As proof of concept, it was shockingly effective. Within months, scooter transportation had electrified downtown SaMo, helping propel Bird to a billion-dollar valuation and prompting an arms race for micromobility vehicles.
In the end, though—and in some cases, in spite of their best efforts—nearly all of these shared scooter and bike companies have wound up working within restrictions set up for them by American cities. The vehicles are now heavily regulated in Los Angeles, San Francisco, Washington, and New York City, among other places, mired in tiny trial runs that keep them short of the tipping point where transportation becomes viable. The approach will at best stunt the technology’s worth and at worst render it useless, and the trajectory suggests vindication for the controversial approach undertaken by former Uber CEO Travis Kalanick.
Let’s ride-share down memory lane: When Uber officially debuted in 2011, most major cities had kept the number of cabs so low for so long—at the behest of magnates who bet on the value of taxi medallions—that the license to drive a taxi was going for $357,000 in Chicago, $500,000 in Philadelphia, and $1.2 million in New York City. As a barrier to entering a profession, it was more expensive than law school. You know how that story ends: Debt-laden drivers are suffering, speculators like the president’s onetime lawyer Michael Cohen are broke, and Uber is worth more than General Motors.
What happened in between? Kalanick and Uber rode outside the law in many of the cities they entered, operating without permission (or straight-up illegally) until the service had made itself so indispensable to the public that regulation was politically impossible. (Various taxi regulators have been sued by medallion owners for basically letting Uber get away with it.) The company used a tool called Greyball to thwart inquisitive city officials. Politicians who challenged the company were humiliated. Company lobbyists swarmed state legislatures to help override municipal laws they didn’t like.
Uber’s strategy struck observers then (and still does) as the prototypical brash, careless, and entitled entrance of a Silicon Valley startup—a crystallization of Facebook’s now-discredited “move fast and break things” catchphrase. Perhaps the most infamous example was the company’s illegal deployment of its dangerously flawed self-driving car technology in San Francisco, where a test car promptly ran a red light.
Did it need to happen that way? In retrospect, it’s easy to say no. With mild-mannered Dara Khosrowshahi at the wheel, Uber is suddenly running good-government campaigns. “We were probably trading off doing the right thing for growth, and thinking about competition maybe a bit too aggressively, and some of those things were mistakes,” he told the New Yorker this spring about the Kalanick era.
In ways, the micromobility companies in the U.S. that made calls from the Uber playbook were punished for arriving on the scene just as Uber was reining itself in—and cities would not get caught flat-footed again. By this summer, the entire footloose scooter experiment was grinding to a halt as cities threatened to seize the vehicles. “We cannot overstate the public safety hazard that operating motorized scooters pose on City sidewalks,” the San Francisco city attorney hyperventilated, citing no crash or injury data. Scooters were withdrawn.
Now, it seems the scooter companies are on the bike-share path, which is to say, working with city governments. The results of the bike startups’ good-faith outreach have been disappointing. In bike-friendly Washington, for example, the District limited each company to a combination of 400 bikes and scooters, ensuring that no single company—and probably not all of them together—could furnish a commuter with a reliable transportation alternative.
Worse yet is the trial underway in New York City, where dockless bikes have been relegated to scattered deployments in isolated neighborhoods far from the zone covered by the city’s phenomenally successful Citi Bike system.
That appears to be the path forward for scooter companies as well. Santa Monica will permit 2,000 among four companies (about as many as Bird was operating alone). Los Angeles will permit each company to deploy 3,000 scooters citywide, with bonus allotments available for low-income neighborhoods. The city of San Francisco will permit just 1,250 electric scooters total—compared with approximately 45,000 ride-share vehicles. All in all, it’s a regulatory process that seems to ensure that scooters will retain novelty status.
Am I crazy to suggest that these jumbo-size toys would otherwise have the potential to cause a transportation shake-up on the level of Uber and Lyft? The economics of micromobility businesses are remarkable. Take e-bike company Jump, now owned by Uber: It says it buys e-bikes for $1,000 a piece. The service costs $2 for a 30-minute ride, with a per-minute charge after that. During San Francisco’s Jump trial, each bike was ridden six to seven times a day, eating into Uber’s core service. The bikes pay for themselves in just a few months. Scooters appear to look even better: Alison Griswold did a quick back-of-napkin calculation that suggests a Santa Monica scooter could pay for itself in just a few weeks.
There’s also the China parallel, which offers evidence for the success of a messy rollout. Dockless bike-share companies Ofo and Mobike flooded Chinese cities with tens of thousands of bicycles, inventing a new transportation mode overnight. This helped bump the share of miles traveled in Chinese cities by bicycle from 5.5 percent to 11.6 percent. In Shenzhen, private car travel fell by 10 percent. This kind of radical change was possible only because the bikes were everywhere. A bike in Beijing, like an Uber in Los Angeles, is never more than five minutes away—and usually much closer.
And while Chinese cities have always been bike-friendly, there’s a market here too: More than 35 percent of vehicle trips are two miles or less, according to the 2017 National Household Travel Survey. In San Francisco, the only limit on the utility of electric bicycles—which started cannibalizing Uber’s car trips as soon as the company deployed them—appears to be the number of bikes and scooters that the companies can put on the street: a measly 250.
Regulators say Bird, Lime, and company got what they had coming. They would have surely stuck with Kalanick’s hardball approach if they could have. But it’s hard to imagine any city would have rolled out the red carpet on its own for a radical, messy transportation experiment.
The one exception is Seattle. As Wired reported this summer, the city has one-quarter of the nation’s dockless bikes—and something to show for it: The bikes get used three times as much as those elsewhere in the U.S.
Generally, though, the municipal backlash seems to demonstrate two things. First, city officials were humiliated by their inability to control Uber and Airbnb and are trying to make up for it. Second, local governments are conservative. They may talk a big game about climate change and pedestrian safety, but they are perfectly happy to maintain the status quo in which everyone drives everywhere all the time.