SA-Based Blue Duck Threatens to Leave Town After Scooter Bid Rejected by City

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Blue duck scooters downtown on June 25, 2019.

Stephanie Marquez / Rivard Report

San Antonio-based Blue Duck Scooters has filed a $30 million equity offering.

Nine scooter-share companies hailing from such places as Chicago, California, and Austin have applied for three City contracts to operate here beyond September. Blue Duck Scooters, the only locally headquartered company, wasn’t among them.

Blue Duck, headed by father-and-son team Paul and Eric Bell, missed the City’s submission deadline of 11 a.m. on July 22 – by one minute, according to a letter from City Manager Erik Walsh. The company, which has been operating near the Pearl area since last year, appealed to the City to accept its submission anyway. The City ultimately concluded no extenuating circumstances warranted its acceptance of the late proposal.

“Given the one minute time stamp, we gave your request to accept the proposal careful and thoughtful consideration,” the Aug. 7 letter stated. “However, it is in the best interest of fairness to those who have submitted their proposals in accordance with the stated criteria that we not accept your proposal because it was not timely.”

In a statement Friday, Blue Duck CEO Eric Bell expressed disappointment in the City’s decision not to accept its proposal. Bell said the company filed the requisite paperwork right at 11 a.m. and accused the City of violating the terms of the government bidding process.

“The City took custody of the sealed box of [Blue Duck’s proposal] documents at 11 a.m., and it took their clerical process a few seconds to time-stamp it,” he said in a text. “Therein lies the dispute.”

Even if the company were late by one minute, the City should have “waived this immaterial defect and accepted the proposal,” he said.

“The City’s refusal to accept the proposal was in bad faith and should have been corrected,” Bell said in the statement. “This level of bureaucracy is what prevents local high-growth companies from thriving in these markets. We were committed to growing our small company in San Antonio, despite the well-known shortcomings of the City and its infrastructure. … We were committed to being a part of seeing the City we love grow.”

Blue Duck is weighing moving its headquarters away from San Antonio in light of the episode. Bell, who spoke to the Rivard Report by phone Friday while traveling in California, said the company would open a process to consider what other cities might have to offer it.

“We love the people of San Antonio and always will, but it’s time for Blue Duck to leave the nest,” Bell said in the statement.

Among the nine proposals the City received were applications from Bird, Lime, Lyft, Razor, and Spin, which currently operate in San Antonio. Austin-based Frog Scooters, OjO Electric, Chicago-based VeoRide, and Los Angeles-based Wheels Labs also submitted proposals.

For competitive reasons, vendors usually respond to City contract bids on the final day they’re accepted. Bidding for the three City contracts opened on June 7, but the first submissions weren’t received until July 19, one business day before the deadline. The last accepted submission was timestamped at 10:20 a.m. on July 22, according to information obtained from an open records request.

Because it is headquartered in San Antonio and has been established for more than a year, Blue Duck would have received at least 10 of the total 100 points the City awards in its process for evaluating proposals. The City has a local preference program for selecting vendors that are either headquartered in San Antonio or have a local office.

Other considerations include the bidders’ finances, qualifications, the quality of their proposal, and whether the companies would share revenue with the City in addition to paying permitting fees.

Blue Duck has permits to operate in Olmos Park and Alamo Heights as well as in the Southeast San Antonio Brooks development. The company had hoped to win a City contract and connect micromobility from the urban core to San Antonio’s many suburbs and smaller municipalities.

Backed by venture capital, the startup had lofty ambitions last year to deploy tens of thousands of scooters in cities and college campuses across the Southwestern U.S. But many of its expansion attempts have hit roadblocks.

The company launched in San Marcos near Texas State University last year only to have its vehicles impounded and barred from campus. Its launch at the Southwestern University campus in Georgetown was met with similar force. After arriving in Pensacola, Florida, in April without a business license to operate there, Blue Duck was bounced from that city but could return this month if the Pensacola City Council votes to allow its operation.

Blue Duck has operated in Corpus Christi for several months and launched a partnership with the City of Laredo in June.

Its 100 permitted scooters will have to be removed from San Antonio streets when the new City contracts with dockless vehicle providers go into effect.

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