Cities struggle with dockless bikes, scooters

The U.S. experiment with dockless bikeshare and scooters is at a crossroads, with operators and cities struggling to find a balance between governments' need to regulate the services without stifling the companies' ability to make money.

Dockless bikeshare giant Ofo has pulled out of several major U.S. markets — including Washington, Chicago and Miami — citing regulatory hurdles, while backlash has restrained the explosive growth of scooter operations nationally.

"What we are seeing around the country is a very rapidly evolving system," Seattle City Council member Mike O'Brien said last week before the council approved one of the nation's most comprehensive sets of regulations for the industry.

Dockless bike systems began to pop up in the United States a year ago, growing exponentially in part thanks to the millions of dollars that investors such as Uber and Google have put into companies such as Lime, JUMP Bikes and Bird.

While many communities were excited by the opportunity dockless bikes and scooters presented to expand car-free commuting options for residents, they were unprepared for the massive growth and the public backlash as abandoned bikes and scooters began clogging public spaces. The lack of regulation also has led to increased tension among other road users — and pedestrians — over issues such as right of way and where the vehicles are permitted.

In the nation's capital, one of the first U.S. cities to permit the dockless services, Chinese competitors Ofo and Mobike recently pulled their services, citing Washington's restrictions on fleet size and its slowness in moving the program from the pilot phase to permanent.

Many residents who have come to depend on the services are working with advocates to push Washington regulators to reconsider their rules. They succeeded in convincing the city to abandon an unpopular plan to impose a $200-per-bike fee on operators and are now urging the city to consider lifting the cap on fleets from 400 per company to allow up to 20,000 dockless bikes in the city.

Elsewhere, cities are still trying to find the right approach. Some have banned the services, reacting to the unannounced arrival of the scooters and bikes with "cease and desist" orders.

San Francisco banned all shared e-scooters in June, forcing companies to stop operations and go through a permitting process. A Los Angeles City Council member last week called for a ban on scooters and asked the city to issues cease-and-desist letters to companies already operating in the city.

Meanwhile, the Seattle City Council voted to allow up to 20,000 bikes, doubling the number now available. But with the expansion, the city also adopted a plan to allow four companies to operate up to 5,000 bikes each — as long as they pay the city an annual fee of $250,000.

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"Some cities are finding they regulated too much too quickly," said Paul Lewis, vice president of policy and finance at the Eno Center for Transportation. "The bottom line is they want more people bicycling and scootering and things that don't involve driving a car."

They also may find their regulations unpopular among the commuting public, he said, which studies suggest have generally positive views of the dockless services. Many residents frustrated by troubled transit systems are willing to give the services a try.

Ofo officials have criticized caps on fleets as shortsighted and a barrier for companies to succeed.

Experts say American cities have taken a tougher approach in regulating the services than their counterparts in Europe, where the focus has centered on addressing public space issues and vandalism and theft.

U.S. cities were among the first to implement operating fees ranging from a couple hundred dollars to tens of thousands of dollars. They also have more rigorously applied caps on fleet sizes in an effort to avoid oversupply scenarios like those in China, where images of hundreds and thousands of abandoned bikes piled atop one another have drawn criticism.

"That element has made operating in the U.S. a little more challenging for some companies," said Dana Yanocha, senior research associate at the Institute for Transportation & Development Policy, which studies dockless industry.

As a result, dockless companies have shifted their strategy for entering U.S. markets from lobbying officials for permission to operate to showing up unannounced — similar to the way Uber and other transportation start-ups did. Their rationale: If there are no regulations prohibiting their operations, there is no harm in them launching without permission.

Critics of the programs say cities aren't regulating enough.

"If they get their wishes and the city grants them the ability to have thousands of bikes on the sidewalks, the obstacles, the potential for tripping and injury will grow exponentially," said Steven Richert, a personal fitness trainer in Washington who works with the elderly and people with disabilities who struggle to navigate city streets. "What I would hope cities would do is to stop this program before it gets any worse. But at least begin to regulate it, which they haven't done."

Transportation officials and advocates for multimodal transportation options say the sidewalk problems can be remedied with regulation, education and enforcement. Studies and companies report complaints are dwindling as users learn dockless decorum, companies implement incentives and penalties for reckless usage, and the communities adjust to the new services.

What cities are likely to continue to wrestle with is finding the right regulations to govern the services, from what their ideal number of devices is to determining reasonable operational fees. And, they may continue to face that question as more technologies emerge.

"These private companies aren't going away," Yanocha said.