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How San Francisco became an afterthought in the scooter wars

How San Francisco became an afterthought in the scooter wars


‘Every city in the world is going to have small shared electric vehicles’

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Something funny happened while San Francisco was in the throes of its “scooter wars”: the city became a sidenote.

San Francisco’s temporary ban on the shared electric two-wheelers that appeared on streets and sidewalks overnight earlier this spring started on June 4th. It will continue indefinitely until up to five companies out of 12 applicants are offered city permits. (That process was supposed to conclude by the end of June, but as of press time, no permits had been issued, and there was no timeline for when they might be. “They have kind of a code of silence,” one scooter company official said of city regulators.)

Scooters require less overhead than a fleet of cars, so they might be cheaper to operate

In the meantime, scooters spread well beyond the Bay Area. In the months since their first appearance in an American city in March, rentable dockless electric scooters have appeared in Austin, Miami, New Orleans, Salt Lake City, Indianapolis, and more than 20 other cities of various sizes, densities, and current levels of dependence on private cars. It’s not just the US, either: on May 21st, Moscow announced it was also implementing shared scooters with the officially sanctioned launch of “Delismokat” (literally: “Sharescooter”). Other European cities that will allow scooter rentals include Barcelona, Paris, Zurich, and Berlin.

These cities have bought into the idea that other transit upstarts, urbanist wonks, and billion-dollar companies have: scooters are the next big thing, the killer app that will deliver eco-friendly relief to the globe’s traffic-choked metropolises. Better yet, they have a growth curve similar to Uber and Lyft, which are now near-ubiquitous anywhere a car can be found. Scooters also require less overhead than a fleet of cars, so they might be cheaper to operate.

“That’s the big bet,” says Euwyn Poon, a Y Combinator alum who co-founded Spin, one of the three San Francisco-based companies that started dropping scooters in transit corridors in the city in March.

Spin began with shared bicycles, but it quickly pivoted to scooters after seeing their immense popularity. And scooter expansion at a global scale, limited only by investment runway and cities’ varying attitudes, “has been part of our strategy from day 1,” he says.

“This is the modern subway, in a sense,” adds Poon, whose company has expanded to about 18 cities and 30 college campuses, including Duke, UC San Diego, and the University of Washington, while working on San Francisco’s city permitting processes. “And I think we’re pretty close to where this is going to scale pretty well.”

“This is the modern subway, in a sense.”

Individual companies were reticent to share explicit details of their global expansion plans; Lime, Uber, Lyft, Spin, Scoot, Bird, and Ridecell declined to comment on the specifics of their plans. But it seems clear that San Francisco’s big race — 12 companies are currently competing for a slice of no more than 1,250 permitted scooters — is just a prelude. The rapid expansions into other markets suggest these little scooters could be big business.

“Here’s the deal: every city in the world is going to have small shared electric vehicles,” says Michael Keating, CEO of San Francisco-based company Scoot. Scoot launched in 2012 with electric mopeds, which are cheaper Vespa competitors with the pop to compete for speed with cars, complete with helmets and room for cargo. But the company quickly pivoted to add the cheaper kick scooters after seeing the speed with which the public embraced them, launching internationally in Barcelona in late May. According to Poon, scooters’ potential is limited only by cities’ sizes and density. Anywhere where 50,000 or more people live could be a potential scooter market, as long as the environment is dense enough, Poon says. “Given the ‘park anywhere’ model, obviously denser environments work best.”

And that’s why San Francisco is now somewhat irrelevant: a local permit to operate as few as 250 scooters in a city that just recently supported as many as 4,000 before the crackdown is empirically small-time compared to the global stakes Poon and Keating say they are playing for. The potential has also attracted the attention of Uber and Lyft. Uber acquired electric bike outfit Jump in April, and yesterday, Uber announced it was partnering with Lime. Lyft has been working on its own in-house scooter brand since at least May and has also acquired Motivate, the biggest bike-sharing company in the US. Both Jump and Lyft have applied for a San Francisco permit.

The first scooters in San Francisco followed a now-familiar model: “dump the scooters first and ask for permission later.” Naturally, this irked local government officials, even ones that described the scooters as “very cool.” But there have also been deviations from that script. Some cities, like Denver, have responded with a temporary ban and an order to remove the devices until they can be made legitimate with a permit. In Dallas, San Francisco-based Bird and Lime launched their services after city officials quickly passed a law legalizing “motor-assisted scooters.”

Bird and Lime did not make company officials available for interviews. In an emailed statement, a Bird spokesman said, “We see a lot of opportunity for growth in cities across the U.S. and around the world.”

“Most car-sharing services are not profitable.”

Uber and Lyft are angling to become giants in the scooter space, and their plays appear global, though they don’t actually own any scooters yet. Their core products — private vehicles acting as taxis — are still famously unprofitable. Those cars may even help create the traffic that makes scooters so attractive. It stands to reason, then, that companies with their global reach and their venture-funded runway would try to leverage their power to launch scooters. Through a spokeswoman, Uber, which acquired Jump, declined an interview. Lyft, which is launching its own branded scooter-sharing service, did not respond to an email seeking comment.

“You look at car-sharing, and most car-sharing services are not profitable,” says Aarjav Trivedi, CEO of San Francisco Ridecell. “And with ride-sharing, it can take 30 minutes to go three miles in some places … It would not be good for the world to push Uber and Lyft.”

Ridecell operated car- and bike-sharing in cities including Portland before reacting to the scooter craze “in our hometown” by applying for a San Francisco permit. Trivedi declined to provide specifics on his company’s specific expansion plans. He also declined to say how many scooters a market like San Francisco can truly support or how a six-month pilot limited to no more than 1,250 vehicles would answer that question.

If nothing else, San Francisco did demonstrate that it’s still an incubator and testing ground. That may come in handy for future prototypes with room for cargo, a second passenger, a seat or some kind of other accommodation for the physically infirm, or for the next big thing — whatever it turns out to be.

At least for now, the big thing everywhere is on two wheels, can be activated by a smartphone, and plugs into a wall.

“The two-wheeled scooter is an important form of mobility in dense, urbanized cities,” Trivedi says. “My sense is that everyone is very serious about this business in the long run.”