Dockless Bikes, E-Scooters, and Urban Transportation Policy Hypocrisy

In August 2017, I wrote about the municipal government cronyism and monopoly franchise agreements driving the controversy over unsubsidized dockless bikesharing companies. In the rapidly evolving world of privately financed urban micromobility, electric scooters have now joined dockless bikesharing at the center of the debate. Here, municipal cronyism also appears to have evolved from protecting subsidized monopoly providers into classic shakedown efforts.

These shakedowns are becoming obnoxiously common, often under the guise of nebulous concerns over safety. As critics recite anecdotes untethered from crash and injury data to scare the public, politicians and bureaucrats devise new forms of legal extortion.

At the same time, cities across the country are adopting so-called “Vision Zero” policies, which aim to reduce traffic deaths to zero largely by slowing automobile speeds and promoting alternative transportation modes to driving. To be sure, reducing traffic fatalities is a worthy cause. More than 37,000 Americans died last year and many more were injured in automobile crashes—although these severe crashes occur disproportionately in rural areas. But zero urban traffic fatalities is both unrealistic and likely undesirable given the very real trade-offs. For instance, slowing average vehicle speeds through the installation of traffic calming devices can also slow fire and EMS response times, potentially leading to increases in deaths from non-traffic medical emergencies such as those arising from cardiac arrest that exceed pedestrian lives saved through these infrastructure interventions.

That being said, some suggestions from Vision Zero advocates, especially improved surface street design and traffic signal optimization for pedestrian-friendliness, are welcome. U.S. cities that have adopted Vision Zero policies include Boston, Chicago, Denver, New York, San Francisco, and Washington. One might expect these cities to support private investment in non-automotive transportation, namely these micromobility dockless bikeshare and e-scooter services. Unfortunately, each of these cities has been openly hostile—in varying degrees—to these new entrants.

Seattle is now charging companies $250,000 for the city government’s blessing to start operating dockless bikeshare networks for a maximum of 5,000 bikes per company, for a maximum of four companies—or at minimum $50 per bike per year for those anointed firms. This led at least one company to pull out of Seattle.

After shutting down private e-scooter companies earlier this year, Richmond, Virginia’s leaders have proposed new conditions for operating approval: a $40,000 annual fee for the privilege of operating 100 scooters—or $400 per scooter per year. For a point of comparison, the Xiaomi m365 electric scooter manufactured by Segway-Ninebot, which was adopted by several e-scooter companies, retails for around $600. Imagine you drove for Uber with a new $20,000 car and your city government charged you more than $13,000 per year in vehicle registration fees. That’s akin what Richmond is proposing to do to e-scooter companies.

Absurdly high fees and low vehicle caps undermine the potential network effects of micromobility. Only when bikes and scooters are both affordable and accessible to users will they provide a cost-competitive alternative to driving. Making it prohibitively expensive to operate an efficient network of shared dockless bikes or scooters denies consumers the benefits of transportation supported by private enterprise rather than taxpayer subsidies. And hypocritically, it runs counter to the goals of Vision Zero policies touted by many of these same anti-micromobility politicians.