Scooter Companies vs. the Regulators

They’re at each other’s throats. But there’s a way to bring them together.

A man riding an electric scooter on a crowded street.
A user rides a Spin scooter on April 17 in San Francisco.
Justin Sullivan/Getty Images

Hell hath no fury like a regulator scorned. At least, that’s what Lime says in its recent lawsuit against San Francisco’s Municipal Transportation Authority. The scooter-sharing unicorn none-too-subtly accused city officials of rejecting its bid to operate in the city as revenge for Uber’s, perceived misdeeds, and for “releasing [its] products in a disruptive fashion.”

San Francisco’s desire to tap the brakes with Lime was, of course, understandable. City officials won’t soon forget their experience with ride-sharing startups—now infamous for storming municipalities from Minneapolis to Munich using what many viewed as scorched-earth tactics. Initially, micromobility startups like Bird and Lime appeared to be taking a page from the ride-sharing playbook. Instead of getting pre-clearance, they descended on cities the world over. Sometimes, that meant hundreds of scooters simply appearing overnight.

For many residents––particularly those in transportation-starved areas––this sudden arrival of new mobility options was thrilling. But for city officials, it could feel less like the dawn of a new era of mobility than an invasion. Some awoke to streets strewn with scooters, piling public complaints, and even spiking emergency room admissions. Scooters even ended up in bodies of water. As a result, just the sight of a scooter cresting a hill was enough to evoke the “Ride of the Valkyries” in officials’ minds––a state of affairs that led to worldwide crackdowns, impounded scooters, and war of words that has spilled over from the streets to the courts.

Depending on which side of the argument you fall on, this uneasy relationship between mobility innovators and regulators can look very different. On one hand, transportation has long been in desperate need of innovation. Transit infrastructure is chronically underfunded. Electric vehicles are struggling to find buyers. Subway riders are still searching for reliable predictors of arrival times. More ambitious efforts like high-speed rail systems can be subject to labyrinthine approvals and painful delays, sometimes pushing already-lengthy completion dates out by years or putting entire projects in jeopardy.

And that’s just for technologies we know how to build. Radically different concepts can require decades of concentrated investment—something governments can struggle to allocate funding for, assuming they even have the stomach to support it. It’s no wonder, then, that Silicon Valley’s developers would become frustrated in the morass of traditional transportation policy and planning. Instead of drafting proposals for 30-year-long projects, or asking city residents to simply imagine a world of automated vehicles that might one day exist, they’ve brought software-paced innovation to the hardware-based world of transportation. In doing so, they’ve successfully directed bursts of investment into full-scale deployments that allow customers to fundamentally change how they get around.

This, of course, is not how mobility experiments usually work. The precautionary principle and the scientific method lead scientists and engineers to make small, deliberate changes to complex systems in an attempt to understand the full extent of their impact. Regulators, in other words, want to see innovations piloted first.

So why don’t mobility innovators like Lime and Bird simply prototype their scooter deployments—maybe with a preapproved beta app and a few test users? Because doing so would almost guarantee failure. After all, transportation systems are large, complex, and socially intertwined. They don’t scale down well for fundamental reasons. Functional mobility depends on the widespread availability of vehicles. Without it, users don’t stay on a platform for long. There’s also mounting evidence that the safety of new mobility types can improve nonlinearly with scale—in other words, early users of new devices can face dramatically higher risks if drivers don’t know to look out for them. Simply put, you can’t pilot Uber or Lime. Indeed, the scrap heap of innovators who have tried and failed is long and ever-lengthening.

But this inherent limitation of pilots isn’t just bad for innovators. It affects regulators too. That’s because they’re tasked with evaluating the benefits and risks of new technologies. And effective evaluation means observing and understanding innovation’s true impacts—good and bad. Often, these cannot be assessed by simply looking at a small-scale pilot, then multiplying by 10 or 100. Some properties of scale are emergent—they don’t follow predictably from growth.

Consider Facebook. In its early days, the company’s “move fast and break things” mantra was essentially tongue-in-cheek. It would take years for regulators—and the company itself—to recognize what it was truly capable of breaking. Who could have imagined as recently as a decade ago that an app for sharing college photos would scale into a global network capable of both powering the Arab Spring and influencing presidential elections? This phenomenon holds true in the transportation sector too.

Yet it’s these very sorts of cautionary tales that lead regulators to turn to pilots in the first place. Limiting the size of a deployment, after all, gives regulators a way to mitigate its potential negative impacts. Unbounded growth also means unbounded risk. And no matter whether you’re tasked with supervising experimental-vehicle pilots, ensuring that consumer products are safe, or licensing drivers, simply limiting size can reduce risks across the board.

If we want to let innovators scale by relaxing size restrictions, regulators will need other mechanisms for managing risks. What might these look like? Mandatory data disclosure is one option. It means regulators needn’t take innovators’ assurances at face value––a fact that probably accounts for why we’ve seen numerous cities demanding it.

But we could reduce risk using the very same mechanism we know is increasing it: time. Instead of limiting micromobility pilots in size, imagine that we let innovators do what they do best: create and scale. In fact, suppose we threw down the gauntlet to see just how fast they can move. Say, for example, we gave scooter companies a six-month pilot of unlimited size. It would be a chance to win over as many residents as possible by improving their mobility options. But it would also require an accessible app, reliable service, efficient pricing, diverse options, and—most importantly—operating in manner that doesn’t turn nonusers into vocal critics. And getting that last part right means fostering actual dialogues with government officials as well as with community members who may be excluded, or even adversely impacted, by new services.

What’s especially promising about this approach is that it could be a win-win, not just for regulators and innovators, but for citizens too. Digital transportation providers chafe at limitations on scale and pace, which they perceive as blunting their innovative potential. Meanwhile, regulators are understandably angry with companies that brazenly ignore laws while running vast, real-time experiments on millions of unsuspecting human subjects. But lost in the fog of war is growing recognition that the big problems facing ordinary citizens require big fixes. Climate change, rising traffic fatalities, and truly equitable mobility: These are large-scale problems that require large-scale solutions.

Small-scale pilots won’t fix problems the size of climate change. But eliminating all constraints would be an abdication of regulators’ responsibilities to protect citizens. We need a new way to let innovators fail fast without failing to explore solutions that can move society forward. It’s time.