When they first appeared on the sidewalks of American cities in the fall of 2017 and spring 2018, rentable electric scooters felt as though they’d popped up out of nowhere—in part because they basically had. In cities like Santa Monica, California, and Austin, Texas, startups such as Bird and Lime didn’t ask local officials for permission before planting fleets of e-scooters, figuring that the shared vehicles would prove enough of a hit that cities would accept them. They generally were, and so by last year even more e-scooters, in even more towns, appeared with the dawn of spring. By now, e-scooters are an entrenched feature of urban life in many cities—but the wild-bloom era is ending.
Cities know that shared e-scooter ridership rises with the thermometer—in many northern cities, the devices are pulled during winter—but this year they’ll be even more prepared. Across the continent, local transportation officials have rejiggered their regulations for 2020, incorporating insights gleaned from recent pilot projects. As a result, the experience of riding an e-scooter—and the business of operating a fleet of them—will be different, and likely improved, in many cities. It should, in theory, be a lot easier to find a scooter when you want one. But your favorite brand might be missing, because of a culling of e-scooter operators that has already begun. That culling will throttle the industry, allowing some companies a greater presence in some markets, but preventing many from attaining national dominance.
While ride-hailing services like Uber and Lyft are now mostly regulated at the state level, cities remain in charge of overseeing e-scooters. After being caught off-guard by their explosive emergence two years ago, cities from San Francisco to Arlington, Virginia, oversaw limited e-scooter programs in 2019 and surveyed riders afterward to see what happened. Their findings generally supported the theory that e-scooters can provide an alternative to automobile trips, especially shorter ones. In Chicago, a survey of e-scooter riders suggested that almost two-thirds of e-scooter trips would have otherwise been taken by car, taxi, or ride hail. In Minneapolis, the city’s Department of Public Works ran a similar survey, concluding that 55 percent of e-scooter trips replaced one of those three options.
Encouraged by such findings, many cities are now moving to loosen their caps on devices. This year the number of permitted e-scooters in D.C. will grow from 5,235 to at least 10,000, and in San Francisco from 2,500 to at least 4,000. Jamie Parks, the livable streets director for the San Francisco Municipal Transportation Agency, says his agency’s pilot in 2019 bore out the car replacement theory. “We found over 40 percent of e-scooter trips were displacing single-occupancy vehicle trips,” he told me.
With more e-scooters on the street, it should be easier for riders to find an available one nearby. That should boost overall e-scooter ridership, taking cars off the street and almost certainly improving the bottom line of operators, which are under pressure to show strong financials after having raised hundreds of millions of dollars in venture capital to subsidize their rapid expansion into new markets. Providing more trips in a city allows e-scooter companies to spread out fixed costs (such as research and development and marketing). Kyle Rowe, Spin’s head of local government partnerships, says that managing a larger e-scooter fleet enables his company to invest more in low-income programming and safety education programs.
Simply increasing the number of scooters attached to a permit is all gravy for the operators, but there is a wrinkle: Even as cities expand the total number of permitted devices, many are getting ready to shrink the number of operator licenses they give out. That makes the value of a permit even higher, since more vehicles are allowed with each one, but it also means more companies will be shut out.
In D.C. the number of permitted e-scooter companies will fall from eight last year to four this spring. Department of Transportation Director Jeff Marootian says his agency wants to improve the user experience for scooter riders: “I know people who like e-scooters, but they don’t like having to jump between apps. So we’re trying to help you have more availability, and less headache finding e-scooters.” He expects residents will benefit from less congestion, as only half as many operators will be driving through the city to collect and redeploy their fleets. He also believes his agency can better monitor fewer operators, using automatically reported data to ensure they comply with rules around vehicle parking and equitable deployment. That could reduce common complaints about e-scooters, such as devices blocking sidewalk paths.
Cities like D.C. award their operating permits through open and competitive application processes. Although the e-scooter companies generally agree that shrinking the total number of permits can improve user experience and boost the industry’s profitability, they have too much at stake to stay silent if they aren’t ultimately awarded permits, especially in a major market.
Emily Warren, the director of policy at urban planning consultancy Nelson\Nygaard (and a former employee of Lime and Lyft), thinks fights over the yanked contracts are inevitable. “In the abstract, all the operators think it’s a bad thing to have so many brands in a single market. But in a particular city, they have everything to lose if they don’t get a permit. So they fight back.” Indeed they do. In Tampa, pushback from unsuccessful e-scooter applicants last year led the city to rerun its permitting process entirely.
In D.C. the 2020 permits were awarded in December to Jump, Lyft, Skip, and Spin—but notably not to Lime or Bird, which have been local mainstays. Both companies complained about the selection process, leading the city’s transportation department to backpedal and allow all devices to remain on D.C. streets while losing applicants lodged formal appeals (in contrast, San Francisco officials forced Skip* to pull its devices while its appeal was considered). But D.C.’s appeals process provided only a short reprieve; as of this week, the city has now reaffirmed its original selections, meaning Lime and Bird (as well as Razor) must remove their e-scooters from D.C. by April 1.
Atlanta, Salt Lake City, and Santa Monica are among other cities where leaders have also suggested reducing e-scooter permits. Although no final decision has been made, Josh Johnson, the advanced mobility director in Minneapolis’ Department of Public Works, says his city is considering reducing last year’s three permits to two in 2020, while possibly increasing the overall cap of 2,500 devices. “We’re willing to grant the scooter companies more market share in exchange for their greater commitments to pursue our goals around equity and safety,” he says. Chicago hasn’t announced its 2020 program yet, but the city’s Department of Transportation published an e-scooter pilot evaluation in January that hinted at a permit reduction. Across the Atlantic, Paris is pursuing a similar strategy, shrinking its 12 scooter operators to just three.
These shifts may seem sudden—especially for the companies that will see abrupt ends to chunks of their businesses—but they suggest that the frenzied introduction of e-scooters has transitioned into a more mature period for the transportation mode. The combination of more vehicles and fewer operators should mean that you’ll be more likely to find an available scooter when you want one (while wasting less time searching across apps). The culling of operators could give the e-scooter market a better shot at financial viability, but it will also mean casualties in the industry; some familiar brands won’t reemerge on city streets this spring along with the blossoms and songbirds. Given the brutal unit economics of the e-scooter market, some of those brands may well have disappeared completely when spring arrives in 2021.
Correction, Feb. 27, 2020: This article originally misidentified the company that San Francisco forced to pull its devices. It was Skip, not Spin.