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Scooters – The Next Mobility Wave

Electric GPS-enabled scooter and bicycle rental companies like Bird, LimeBike, Spin and Jump Bike (acquired by Uber) are spreading across major U.S. cities like San Francisco, San Diego, Austin, and Washington, DC, driven by an influx of investment from venture capital focused on innovative mobility ideas. They are met with enthusiasm by some riders who can easily find a scooter or bike using an app on their phone, unlock it by scanning a code on the handle, and off they go. Cities and municipalities, however, are cautious to embrace the new technology (sound familiar?), citing a host of problems, including pedestrian injuries, people riding on sidewalks, riders not wearing helmets and unused scooters blocking walkways and critical access to curb space.

Some municipalities believe that these companies are so focused on growth that they are not paying enough attention to identifying solutions to the problems that arise from scooters that can hit speeds up to 15 mph and share sidewalks where people on foot and in wheelchairs usually travel.  Aaron Peskin, an elected official from San Francisco’s Board of Supervisors has received thousands of complaints from frustrated residents. Responding to an angry coalitions of neighborhood, senior, disability, and pedestrian groups, city officials are forced to react quickly. San Francisco’s legislative body has already met to discuss a bill to give the city authority to remove shared scooters without permits or parked in the public right-of-way, penalizing the companies that own them and as of last month, its board of supervisors passed a bill requiring e-scooter rental companies to get city permits (since companies like Bird and LimeBike technically do not need business licenses under current city ordinances) to provide battery-powered scooters. The transportation department in Austin also presented city lawmakers with its own plans to regulate scooters.

City governments’ latest effort to balance the promotion of accessible transportation that could reduce traffic and CO2 emissions, on the one hand, with a general concern for public welfare and safety, on the other hand, is reminiscent of the conflict we saw between cities and ride-hailing startups like Uber and Lyft. Like its e-scooter counterparts, Uber also took a “launch first, ask questions later” approach to the initial rollout of its services and clashed with officials in its hometown and practically every other city it charged into. Like their ride-hailing predecessors, motorized scooter companies are now in the fold challenging regulators.  They have the tough task of determining how private companies and their customers can use their streets without generating ill effects for the rest of the population.

Regulatory issues surrounding the mobility space (from scooters to the self-driving automobiles we normally write about) are a novel and now constant focus of government officials at all levels around the globe, and it appears it will remain that way for some time as investment and innovation continues at a rapid pace in the mobility space.

© 2020 Foley & Lardner LLPNational Law Review, Volume VIII, Number 151


About this Author

Shang Kong, Foley Lardner, Corporate Finance Lawyer, Operating Agreements Attorney

Shang Kong is an associate and business lawyer with Foley & Lardner LLP, where he focuses his practice on corporate finance, representing public and private companies in connection with both stock and asset acquisitions, and operating agreements. He is a member of the firm’s Transactional & Securities Practice and the Automotive Industry Team.

Prior to joining Foley, Mr. Kong was an associate with a national law firm. While earning his law degree, Mr. Kong served as a legal intern with the Wayne County Prosecutor’s Office.