The City of San Antonio has awarded contracts to Bird and Razor as its sole e-scooter operators. Credit: Scott Ball / Rivard Report

San Antonio is moving forward with 2,000 rentable electric scooters split between two companies, as new contracts for Bird and Razor to be the sole scooter companies here took effect this month.

The City of San Antonio was set to sign two-year contracts with three scooter companies to operate a total fleet of 3,000 vehicles, but the third company, San Francisco-based Lime, abruptly withdrew from the market just ahead of Jan. 12, when the contracts were to take effect. The company cited lagging demand in San Antonio as well as the 11 other markets it exited Jan. 9 as it forged ahead with a new profit-driven business strategy.

Lime isn’t the only scooter company to have given up on San Antonio. Uber-owned Jump and Uber’s competitor in the rideshare industry Lyft both departed the city. Lyft was on course to operate in the city as one of the three exclusive operators but declined in November to keep its local scooter operations going.

In just about six months, San Antonio went from one of the most crowded markets in the country – with more than 16,000 authorized vehicles at the height of the popularity of the two-wheeled vehicles and as many as seven scooter companies – to playing a bit part in the national micromobility landscape. A more stringent pattern of regulation in the city has coincided with a drop in demand.

Locally, riding was at its peak in December 2018, when scooter customers took 300,000 rides. By December 2019 that number had fallen to about 82,000.

Low ridership led scooter companies to ratchet down the number of scooters they deploy on a daily basis. Reaching its apex in February 2019, when scooter operators deployed on average more than 6,700 vehicles daily, the number dropped to 2,636 in December.

“The number of rides is starting to come down because I think the novelty is probably wearing off,” said John Jacks, who has overseen the City’s scooter program since its 2018 inception.

David Heard, CEO of Tech Bloc, the local trade association for the tech industry, has lobbied the City for a hands-off approach to regulating the scooter market in the past. After initially rolling out a comparatively loose regulatory structure in late 2018, the City began introducing new controls: It stopped letting new companies in, capped the number of permitted vehicles for existing companies, and introduced a scooter-riding curfew.

Then City Council began contemplating a new model for permitting scooters and scooter companies. Instead of allowing in anyone seeking a permit, the City would solicit bids from a limited number of companies interested in operating in San Antonio. Early conversations revolved around awarding contracts only to two companies, but Tech Bloc worried having only two companies would strain affordability and limit innovation. The City later decided to add a third contract.

With Lime exiting San Antonio, the city has lost a company that invested in the community – with jobs and civic engagement, Heard said. In addition to leaving the city, the company relocated its regional repair center, which employed about 50 workers in North San Antonio, to Austin. The company also had held a number of events to educate the public on scooter riding and engage San Antonians on issues such as micromobility, bike lanes, and mass transit.

“All-in-all, I think we’ll be OK,” Heard said in a text message. “But it’s unfortunate we couldn’t keep what is arguably one of the nation’s top 1-2 dockless companies in town.”

TechBloc CEO David Heard speaks during the announcement of a Lime scooter repair facility in August.

The company cited what it called a dramatic change in the market for its decision to cease local operations. In a blog post announcing its withdrawal from San Antonio and 11 other markets worldwide, the company vowed to prioritize profitability and markets that allow it to maximize profits. It was also the City’s fee structure as part of the new scooter operator contracts that scared Lime off, Heard said.

All three companies were set to pay per-vehicle fees that would amount to $30,000 in total for the first year of the contracts. The first year also included $25,000 per company in infrastructure fees so the City can build parking facilities. In each of the years of the program, the companies would share revenue with the City. In Year 1, the City projected a $424,000 windfall from the revenue-sharing program, with an increase to $582,000 anticipated the following year. Updated figures were not available.

It’s difficult to draw parallels to other cities’ fee structures because municipalities have approached e-scooter regulation in differing ways. San Diego experienced a 180-degree turn, similar to San Antonio’s, from loose regulations to stricter enforcement. There, the approach has been to impound scooters that have been improperly parked; San Antonio rarely impounds scooters. The City of San Diego collected hundreds of thousands of dollars in impoundment fees, threatening repeat offenders’ ability to turn a profit. Lime, which nearly lost its permit because of its many violations in that city, departed San Diego concurrently with San Antonio. Razor did not return a message seeking comment about San Antonio’s fees, and an official with Bird said only that “Bird is committed to being in San Antonio and working with the city to build the best program.”

The fee structure might have contributed to Lime’s departure, but at least one Council member believes the fees won’t be enough to make needed improvements to the city’s mobility infrastructure.

Councilwoman Shirley Gonzales (D5), who voted against the contracts in December because she believed the program was being administered inequitably, said the revenue generated from the program wouldn’t move the needle for the City to add bike lanes, for example, or designated parking for scooters.

As part of the contract-based scooter program, the companies are set to be focused largely downtown. Gonzales said she believes this was done to reduce the amount of work City staff would have to do to administer the program.

“That’s simply not how I believe we should craft policy,” she said.

Cherise Rohr-Allegrini, president of the Lavaca Neighborhood Association south of downtown, sat on the City’s evaluation committee that scored each scooter company bid last summer. Rohr-Allegrini rides scooters but has also advocated for better enforcement around parking and safety. She was hopeful to see what a reduction in the number of scooters could do to eliminate some of the challenges she was seeing in her neighborhood, such as haphazard parking and reckless joyriders.

Now scooters are hard to find in Lavaca at all, she said.

“As much as I’m on board with the contracts and think there were too many [scooters] before, they really are now tourist mobiles,” Rohr-Allegrini said. “That kind of defeats the purpose of micromobility.”

JJ Velasquez

JJ Velasquez is the Rivard Report's technology reporter.

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