San Francisco

San Francisco Is About to Let Electric Scooters Back on the Streets. But One Scooter Company Isn't Happy.

Scooter giant Lime claims the city's permitting process was biased and arbitrary.


Benoit Tessier/REUTERS/Newscom

After months of hostility, harassment, and the outright seizure of their vehicles by city officials, San Francisco may finally allow dockless electric scooter companies back onto city streets. Come Monday, SFMTA—the city's transit agency—plans to allow local scooter start-ups Scoot and Skip to begin operations in the city once again under heavily-conditioned circumstances.

Threatening the return of scooter service however is none other than scooter giant Lime, which was denied a permit and is now suing the city, claiming the process by which these permits were awarded was biased.

"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," said the company in a statement.

Lime had been one of the initial companies to drop its scooters on San Francisco's streets back in March 2018, along with other early entrants Bird and Spin, and thus was on the receiving end of San Francisco's early efforts to quash their permissionless innovation.

Despite their being no prohibition on these dockless e-scooters at the time, San Francisco officials took the view that they were public nuisances, impounding over 500 of the vehicles (including 130 from Lime alone) and sending cease-and-desist letters to the three companies.

What followed was a months-long process by which city hall and SFMTA cobbled together a pilot program that would issue permits to five companies and allow up to 2,500 scooters back onto city streets. At the time Lime, agreed to comply with the new regulations, and along with eleven other scooter companies, applied for a permit.

When permits were finally issued at the end of August, the city inexplicably decided to award them to only two companies—the aforementioned Scoot and Skip—and allow them to only deploy 1,250 scooters.

Neither Lime, nor Bird or Spin, were given permits, in what the company is now claiming is an attempt to unfairly penalize them for operating a lawful, but not explicitly-allowed transit service.

"SFMTA's development of the pilot program and permitting process was biased and flawed from the outset, and aimed to punish companies that lawfully deployed scooters earlier this year," said Lime.

All companies applying for permits to operate in San Francisco were evaluated on a number of categories, including safety, community outreach, plans for low-income and disabled access, and crucially each company's "experience and qualifications" operating scooter programs.

Lime, Bird, and Spin—the three companies to put vehicles out on the street before the city's big scooter crackdown—were all given a 'poor' grade for this last metric, with SFMTA officials claiming that their jumping the gun on providing scooter service meant these companies could not be trusted to follow city regulations going forward.

Also downgraded in this category was ride-sharing company Lyft, a new player in the scooter market, who—despite never having deployed a single scooter on San Francisco's streets—was dinged for the traffic violations its drivers had racked up over the years.

Lyft has also raised complaints about the arbitrary and biased nature of San Francisco's scooter permitting process. In a late September letter sent to San Francisco Mayor London Breed and SFMTA Director Ed Reiskin, Lyft President John Zimmer claimed that initial analysis by city staff ranked his company's application higher, but was then downgraded when the final analysis was released.

"The fact that the final result differed substantially from the initial analysis is indicative of a larger frustration with the process. Scoring criteria was not published in advance, and the scoring analysis that was released afterwards was not tied to the requirements set forth in [permit program regulation]" wrote Zimmer. "This led to what appears to be more arbitrary and inconsistent scoring results."

Zimmer's letter asks the city to reconsider granting only two permits. Lime is going further, demanding that all scooter operations be halted until a fairer appraisal of its application can be conducted.

San Francisco city officials have so far shrugged off Lime's lawsuit, telling the company to work within the system, which they insist was totally above board.

"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," said City Attorney spokesperson John Cote to the San Francisco Examiner.

While one can quibble with Lime's attempt to temporarily stop scooters' return to San Francisco, one can hardly blame them for not trusting the official appeals process given the continual hostility of city government to scooters.

Indeed, SFMTA's refusal to even issue the maximum number of permits allowed by law shows the degree to which San Francisco officials see e-scooter companies, not as valuable partners offering an innovative new service, but instead as hostile invaders that must be kept at bay.