Uber and Lyft have won a key battleground in the electric scooter wars — and it's a huge blow to the $2 billion startup that created the scooter phenomenon

  • In an effort to curb the onslaught of electric scooters, Santa Monica, California, is moving to limit the number of companies that can operate dockless vehicles there.
  • An internal memo reveals that a City Council committee endorsed Lyft and Uber for permits – handing a crushing defeat for dedicated scooter operators Bird and Lime.
  • Santa Monica was the ground zero for electric scooters, because $US2 billion startup Bird rolled out the first scooter-share program nationwide in the coastal city last fall.

In the south Californian city of Santa Monica, the electric scooters that cover the city’s streets and footpaths disappeared on Tuesday in protest of the city’s move to block two venture-backed startups from operating.

The shutdown, called “A Day Without a Scooter,” as well as a protest outside City Hall, was part of a joint campaign from scooter startups Bird and Lime condemning a decision from the Santa Monica City Council to limit the number of companies that can operate dockless vehicles there.

Bird and Lime are fearful they won’t be picked for permits.

In an effort to curb the onslaught of scooters, the city of Santa Monica recently announced a “shared mobility” pilot program that will award four contracts – two scooter and two e-bike operators – with the goal of deploying vehicles in the coastal city this fall.

A special committee started accepting applications last month, then scored the companies across seven categories, including experience, operations, compliance, and parking and safety. While the contracts haven’t been awarded yet, an internal memo from the city’s planning director, released to the public, reveals which companies sit at the top of the heap.

Lyft placed first, with the Uber-owned Jump coming in second, in the committee’s scoring of scooter and e-bike operators. They effectively won the city’s endorsement for contracts to operate, leaving their upstart competition in the dust.

Bird invented the scooter-sharing market

The results were perceived as a major blow to Bird, which began its very existence in Santa Monica.

Tech investors credit Bird with inventing the scooter-sharing market. When the company launched the first scooters in its hometown last fall, its competitors – namely LimeBike, Spin, and Ofo – were still focused on bike-sharing. They added scooters to their inventory in 2018, and LimeBike later rebranded as Lime.

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Lyft doesn’t have scooters or e-bikes in any city, though it bought Motivate, the country’s largest bike-sharing operator, in July. Similarly, Uber got into bike-sharing with its $US100 million acquisition of Jump, which has e-bikes in major US cities, including Austin, Chicago, New York City, and San Francisco.

It’s been less than a year since Bird launched, and already the startup was rumoured to be seeking a $US2 billion valuation in the last funding round. Bird raised $US400 in four months from Sequoia Capital, Greycroft, Tusk Ventures, and Upfront Ventures.

Roelof Botha, a partner at Sequoia who sits on Bird’s board, told Business Insider in June that being first to market places Bird one step ahead of the competition, including giants Uber and Lyft.

“If you’re the one who invented it, you’ve probably thought about the problem many layers deep,” Botha said of Bird.

“That’s the thing with people who copycat – they copy what the see today,” he went on. “But they don’t know what you’ve been thinking. They don’t know the next move that you intend. How you’ve already mapped out the next several months or the next several quarters of product innovations and nuances.”

Birds flock to City Hall in protest

Bird sent an email to its riders in Santa Monica on Tuesday night, saying that a “small city-appointed selection committee” is moving to ban Bird in September, Curbed Los Angeles reported.

It encouraged supporters to gather outside City Hall to voice their support for Bird. The flock responded to the call.


On Tuesday, a crowd of about 200 scooter startup employees, “chargers” (gig-economy workers who scrounge for scooters and charge their batteries to make a quick buck), and supporters swarmed City Hall in black and green Bird and Lime shirts.

A city spokesperson told the Los Angeles Times that nothing has been done to “stop or suspend operations of shared mobility vendors.” Santa Monica will reach a decision in the coming weeks.

Bird did not immediately respond to a request for comment.

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