After flooding dozens of cities with tens of thousands of pay-per-minute electric two-wheelers, the bike and scooter companies have hit a snag: cities are increasingly passing new rules to regulate their use. As part of their effort to get into the good graces of regulators and lawmakers writing these rules, the scooter startups are rolling out new products and initiatives that emphasize charitable giving, outreach to low-income communities, and infrastructure improvements. It’s image rehabilitation 101.
The latest was announced today by Lime, which operates dockless scooters and pedal-assist bikes in 60-plus cities in the US, as well as half a dozen cities in Europe. The San Mateo-based company launched a new “donation module” called Lime Hero, in which customers can opt in to a donation program where a portion of their ride fare will go to a local nonprofit organization.
To start, Lime will be launching pilots next week in Seattle, Washington DC and Austin. Each city has its own unique local partner that will receive donations. In Seattle, Lime is partnering with Cascade Bicycle Club, a champion for better and safer bicycle infrastructure. In Austin, Lime teamed up with Austin Music Foundation, a program to strengthen the local music industry through workshops, panels and networking events. Finally, in Washington DC Lime partnered with Building Bridges Across the River, a non-profit that aims to alleviate social, health, environmental and economic disparities within DC.
The charity project comes on the heels of Lime’s other major initiative to improve access to its bikes and scooters — and also to tamp down its reputation as the modality of choice for North Face-vest-wearing tech bros. Earlier this month, the company expanded its discount program for low-income customers. Previously, rival scooter startup Bird announced it would wave the $1 base ride fee for people who need financial assistance.
Bird is on its own quest to be seen as the safest among the current crop of urban mobility startups. The Los Angeles-based firm has committed to setting aside $1 per day from each scooter in operation to help cities build new protected bike lanes, as well as maintain existing ones by repainting and repairing them. Bird also said it would form a new Global Safety Advisory Board that will “create, advise, and implement global programs, campaigns, and products to improve the safety of those riding Birds and other e-scooters.”
These are all unquestionably good things for these companies to be doing. And while they may claim that their only motivation is to “support a good cause,” it’s impossible to not view these projects through the current political lens. After getting rolled over by Uber and Lyft, many cities don’t want to be caught flat-footed again. And now they have scooters in their sights. Baltimore, Nashville, and Cleveland are just the latest to pass new rules governing their use.
“There is a ton of growing pains in this space and we are going to be seeing more here soon,” said Michal Nakashimada, a product manager at Ride Report who writes a weekly newsletter tracking the micro-mobility industry. “Quite frankly, none of the scooter companies thought it would take off this fast.”
In many ways, scooters are at a crossroads, with operators and cities struggling to find a balance between the need to regulate this new mobility service without stifling the companies’ ability to scale and make money. Many are following San Francisco’s lead in requiring companies to apply for a limited number of operating permits. New York City is working on legislation that would restrict dockless scooters to certain neighborhoods with poor transit options.
Scooter companies that launched without first consulting with city officials are now experiencing a backlash. Last week, Santa Monica’s planning director revealed that ride-hailing companies Lyft and Uber — which do not yet operate scooters anywhere — had submitted the top-ranked applications for a pilot program that will allow up to four companies to operate e-bike and e-scooters in Santa Monica. Bird and Lime, which had previously dominated the city’s scooter offerings, deactivated their vehicles in protest.
In some ways, Bird and Lime were taking directly from the playbook of the company that out-scored them in Santa Monica: Uber. The ride-hailing giant earned the reputation for playing hardball in New York City back in 2015, when its relentless ad campaign and lobbying eventually led the city to drop a proposal limiting the number of vehicles allowed to drive for Uber.
But every political operative working in tech knows by now that recycling an aggressive, burn-the-house-down strategy does more harm than good. When a similar cap proposal came up in New York City again this year, Uber protested but ultimately kept most of its powder dry. The company realized that the political winds had shifted, and that meant working within the confines of new regulations rather than coming out guns blazing.
Some scooter companies, like Spin, are trying to set themselves apart from the pack by underscoring their play-nice reputation. The bigger players, Bird and Lime, are trying to grow and scale their business so they are well positioned for what is sure to be fierce competition with Uber and Lyft. And that means moving faster than a lot of cities would prefer them to move.
Behind the scenes lobbying of lawmakers is one part of that. The other part is rebranding themselves as philanthropic organizations that also happen to rent electric scooters. The question remains: will cities buy in to the charm offensive?