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Electric-scooter companies conquer with a simple strategy: Act first, answer questions later At first glance, it looked like a painful defeat. Mere weeks after they had blanketed Miami streets, electric scooters disappeared overnight, their companies sent packing by city attorneys with cease-and-desist letters in hand. The scooter rental companies` preemptive approach in some ways resembles Uber`s [disruptive" playbook: Bumrush new markets, ignore local regulations, turn riders into voters - act first and apologize later. From their critics` perspective, electric-scooter-rental companies arrive in virgin territory overnight, unleashing chaos and fear before eventually recruiting amenable locals to their ranks, filling their coffers and moving on to the next conquest. From the perspective of their customers, electric-scooter startups are a desperately needed supplement to underdeveloped transportation systems. Their futuristic technology takeover is inevitable, scooter fans maintain, and city officials need to catch up, even if the initial launches feel abrasive. However bullish it seems, the strategy of act first, answer questions later seems to be working. After companies deposited 2,000 scooters on San Francisco streets in March, furious public officials responded by impounding the scooters and issuing cease-and-desist orders. The city is now considering a pilot program that would allow companies to put 2,500 scooters for rent on city streets beginning in July, according to the San Francisco Municipal Transportation Authority. During the scooter rental company`s first 30 days in San Francisco, Bird says, 32,000 riders took 95,418 rides, traveling 143,725 total miles. During the Lime scooters` brief time on the streets of Miami, more than 10,000 Miami residents and visitors took 30,000 trips, saving almost 32,000 pounds of carbon dioxide, the company claimed. Lime is operating in more than 70 cities around the country. Darren Weingard, head of government relations for Skip Scooters, told USA Today that his company decided not to launch after they learned San Francisco was planning to regulate the new form of transportation. His rivals went ahead, he noted, unleashing a preemptive strategy that looks awfully familiar. [Some of what we were seeing [with rivals] seemed out of the old Uber playbook," Weingard told USA Today. [We didn`t want to follow that." Similar struggles have played out in Denver; Santa Monica, Calif.; Washington, D.C.; Nashville and Austin, where scooter rental companies have swooped into town with little warning before seeking constructive talks with city officials who had pushed back. After being pulled from the streets, scooter rental companies say they often expect to be back in the market in a few weeks - sometimes earlier, as cities rush through permits to meet the sudden demand for their services. The smoothest scooter rollout to date, by most accounts, has been in Memphis, where officials introduced a 30-day operating agreement ahead of Bird`s launch, according to the Commercial Appeal. The city council is expected to vote on an ordinance regulating scooter rentals next month. [This is just something that can prove to the world that Memphis is ready, that Memphis is open to business, and that Memphis makes accommodations for things we want," council chairman Berlin F. Boyd told the paper. Memphis leaders said they decided to get ahead of the scooter wave after watching it crash into Nashville. After scooters appeared on sidewalks in the state capital, city officials threatened to impound them, arguing that they represented illegal obstructions of rights of way, according to the Commercial Appeal. Bird`s attorney initially pushed back in Nashville, arguing that the city was [grossly exceeding" the parameters of the city code, before the company decided to remove its scooters and work with city officials on permitting, the paper reported. Jeremy Elrod@JeremyElrod26 8 Jun Replying to @JeremyElrod26 Dockless vehicles are a good, new transportation option for Nashville, and I look forward to integrating them into our city. We have to write regulations that maximize safety and ensure the proper use of Metro's right of way, which belongs to the public. Jeremy Elrod@JeremyElrod26 If Bird continues operating, it will be the bad actor of their industry because it isn't willing to wait on regs. As of right now, all other dockless companies are waiting for Metro to pass regs. I will only work with good actors as we move forward and craft the regs. 12:16 AM - Jun 8, 2018 6 See Jeremy Elrod's other Tweets Even if Nashville had refused to negotiate with Bird, the question is how long they could`ve held out before incurring public pressure to bring back the scooter rentals. The city is home to music festivals and sporting events, the paper noted, ideal venues for alternative forms of transportation. Hundreds of rental scooters had already been deposited across town, giving the public a taste of cheap, electric mobility. [It goes viral very quickly," Baer said. [People like it. It solves a problem for them, and it`s fun."

Electric scooter company Bird is raising $200 million, valuing the company at $2 billion, the company announced this week. It`s a heady ascent from the $15 million the company raised toward a $300 million valuation just three months ago. According to Alison Griswold at Quartz, it is the fastest a company has ever reached a valuation of $1 billion. The news comes just a week after San Francisco ordered Bird and its peers Lime and Spin to pull scooters from the streets before starting a formal pilot program later this year with a total of 1,250 scooters. It came the same day that the city of Santa Monica, where Bird got its start, approved the less restrictive Shared Mobility Pilot Program for scooters and bikes, with no vehicle cap, but it requires operators [to develop systems that remedy improper parking, including pick up/drop off zones and incentives." Such stratospheric fundraising and a crackdown in regulations require us to figure out where each company`s moat - how they protect themselves through the unique value they provide - in this new transportation system lies. Dockless, connected scooters are a service. Even though they are a service of identical units, each transaction is as unique as the user`s route. Like cars, they require energy and therefore need some combination of dedicated space, infrastructure or business model to support charging. Unlike cars, they need redistribution en masse at certain times of day and in certain locations. So they`re public like buses and trains but personalized like cars; they`re individualized, but they have collective chokepoints around charging and redistribution. They`re a network - but do they have a network effect? Technology analyst Ben Thompson offers some insight, beginning with a comparison to ride-hailing networks. The reason we have only a handful of ride-hailing companies, he says, is that a system of drivers and riders is a two-sided network: [As one service gains share, its increased utility of drivers will restrict liquidity on the other service, favoring the larger player." A higher concentration of drivers with one provider means that [riders will, all things being equal, use one service habitually." Thompson says scooters lack this two-sided network effect: Companies are simply [plopping a bunch of scooters on the street." That means electric scooter network companies may have a hard time building that protective moat around themselves: Absent two-sided network effects, the potential moats for, well, self-riding scooters and e-bikes are relatively weak: proprietary technology is likely to provide short-lived advantages at best, and Bird and Lime have plenty of access to capital. Both are experimenting with [charging-sharing", wherein they pay people to charge the scooters in their homes, but both augment that with their own contractors to both charge vehicles and move them to areas with high demand. The biggest moat in this transportation system as a whole might not be in the vehicles, the software that connects them or the network that charges them. It`s in regulation. Each city has its own unique moat: regulatory jurisdiction. When a city sets hard limits on its electric bike or scooter fleet, or caps the number of companies that can participate, there`s potentially no way for a company to enter it at all. Worse still for companies that become active in a market before new rules are enacted: A regulatory reset can give new entrants the opportunity to jump those hurdles far faster. The question, then, is, What changes the dimensions of that moat? Its users, their behavior, and even their unmet, sometimes not-so-obvious needs. Venture fund Social Capital said this week that electric scooter use is a desire path showing where people want to go and how they want to travel. Traveling on the sidewalk or the wrong way down the street is bad behavior; it`s also why personal-injury lawyers have scooters in their sights. At the same time, it could be useful [for city planners and managers, not only as a way of actually getting work done, but also as a signal for what citizens need." Trips that don`t follow rules or norms [may offer real clues as to what your users really want but aren`t telling you." That desire path isn`t [I like to ride on the sidewalk." Rather, it is [I want a service that isn`t a car, can travel a few miles in a personalized fashion, and can be parked off the street." I doubt that any city could have clearly articulated, much less quantified, this [last mile" demand prior to the introduction of vehicles that could meet it. Scooter users might not have been able to quantify that need, either, until there was an opportunity. At the moment, regulation is the widest, deepest moat in the electric bike and electric scooter landscape. I think, though, that their users` desire paths will cross it.

The scooters are coming. The scooter war of attrition has begun in San Francisco. Twelve companies -- including Uber and Lyft -- are vying for just five permits that would allow them to operate a dockless, rentable electric scooter program on city streets, according to the San Francisco Municipal Transportation Agency (SFMTA). San Francisco officials passed a law in April limiting the number of scooters in the city. The law says that over the next year only five companies will get permits to put their scooters throughout the city. The number of scooters is also limited to 1,250 in the first six months. If that number of scooters works, the cap could increase to 2,500. Scooters have become a divisive topic in the Bay Area. The hoopla began after three companies -- Bird, Lime and Spin -- unloaded their e-scooters in San Francisco in late March without any forewarning to lawmakers or residents. Almost instantly, hundreds of scooters swarmed the sidewalks. Some locals rejoiced at being able to easily scoot block to block in the congested city. Other people complained that riders didn't follow the laws of the road and endangered pedestrians by riding on sidewalks and leaving the scooters wherever they felt like it -- blocking parking spots, bike racks and wheelchair accesses. While the city is processing the permits, no company is allowed to have its scooters on city streets. If the companies don't follow that rule, they could forfeit their chance for a permit. The SFMTA, which is issuing the permits, said it'll likely take until the end of June to finalize the permits. "The new permit and pilot was built to prioritize public safety, build in equity and focus on accountability," SFMTA spokesman Paul Rose said in an email. To get the permits, each company has to demonstrate that it'll provide user education on wearing helmets and not riding on sidewalks, as well as best practices for safe scooter parking. They also have to be insured and have a privacy policy to safeguard users' information. The companies additionally need to share trip data with the city, provide access to all neighborhoods and offer a plan for low-income riders. Uber, Lyft, Bird, Lime, Spin, Scoot, Razor, Ofo and Ridecell all confirmed they applied for the permit. The deadline to apply was Thursday. The other three companies -- CycleHop, Uscooter and Skip -- didn't return requests for comment. The San Francisco Chronicle first reported this news. Of these 12 companies, seven are known to make or operate electric scooters -- Bird, Lime, Spin, Uscooter, Skip, Ofo and Razor. Scoot rents out motorized scootersthat look like mopeds but its CEO Michael Keating said the company plans to add kick scooters to its network. Unlike Bird, Lime and Spin, which don't supply helmets with their scooters, Keating said Scoot is looking into providing helmets with its rides. "Scoot aims to address safety and equity," Keating said. "We discourage riding on the sidewalk and work with groups like the SF Bike Coalition to determine reasonable rules of the road for bike lanes." SCOOTER WARS The mad, twisted tale of the electric scooter craze Electric scooters are invading. Bird's CEO leads the charge San Francisco says goodbye to electric scooters, for now The electric scooter war continues. Here's how they work (FAQ) Some of the companies that applied for the permit are already operating public bicycle rental programs, like Ofo, CycleHop, Lime and Uber. Lyft is rumored to be getting into bike rentals too with a possible acquisition of Motivate. Uber applied for the San Francisco scooter permit under its dockless bike rental company, Jump. The ride-hailing service said it plans to offer electric scooters as part of its new direction to become a complete transportation platform. "Bikes, perhaps scooters. I want to get the bus network on. I want to get the BART, or the Metro, et cetera, onto Uber," said Uber CEO Dara Khosrowshahi at Recode's Code Conference last week. "So, any way for you to get from point A to B." First published June 8, 1 p.m. PT. Update, 3:28 p.m. PT: Adds confirmation from Ridecell, Razor and Ofo that they applied for the San Francisco permit. Adds comment from Scoot CEO Michael Keating. Adds comment from SFMTA spokesman Paul Rose. The Smartest Stuff: Innovators are thinking up new ways to make you -- and the world around you -- smarter.