Bird, one of three e-scooter rental companies ousted from San Francisco last year, has finally found a way back into The City.
The company is acquiring its rival, Scoot, one of only two e-scooter companies permitted to operate in San Francisco.
While San Francisco has the option to review e-scooter permits when a company is acquired and possibly deny its operation, Bird has already been approved to continue operating Scoot in The City, the San Francisco Examiner has learned.
Transit officials granted permission to continue operating in San Francisco’s Powered Scooter Share Pilot Program because Scoot, which they said has an excellent track record with San Francisco, will remain a subsidiary of Bird.
By contrast, Bird’s reputation in The City is perhaps less than stellar, considering City Attorney Dennis Herrera sent them a cease-and-desist notice last year to yank its e-scooters off city streets amid concerns that they were parked in the middle of sidewalks, and were operating without city permits — which did not yet exist.
When the permit system was created, The City only granted two permits for companies to operate. Scoot and another rival, Skip, were granted those permits over roughly a dozen other competitors, including Bird.
The San Francisco Municipal Transportation Agency only allowed Bird and Scoot to continue operating under certain conditions, including pledging that the companies would maintain the same number of employees at Scoot, and maintain Scoot’s high standard of pay and benefits.
“We approved the transfer of ownership based on a review of the request and on their assurances to meet the goals of Scooter Share Pilot,” wrote SFMTA spokesperson Paul Rose, in a statement. “These efforts include the promotion of safety as a top priority and improving equity to ensure underrepresented communities can actively participate in the program.”
Multiple news outlets reported Bird’s acquisition of Scoot on Wednesday, which Scoot spokesperson Jasmine Wallsmith also confirmed to the Examiner. TechCrunch reported Scoot is valued at around $71 million.
The purchase did not immediately guarantee San Francisco would permit Scoot to continue operating.
“Backdoor” permit purchases, as some insiders call it, are increasingly becoming a common practice. Ride-hail giant Lyft purchased bikeshare company Motivate in July last year, granting it a contract featuring exclusivity to operate in San Francisco. And Lyft’s rival, Uber, bought dockless e-bike company JUMP in April last year, granting it San Francisco operating permits, too.
Seeing a pattern, the SFMTA crafted its Powered Scooter Share Pilot Program with a provision exactly for this scenario. When a company purchases a permitted e-scooter company, SFMTA Director of Transportation Ed Reiskin is empowered to re-evaluate the permit.
Tuesday, he did exactly that.
But though Reiskin approved Bird and Scoot’s permit transfer — a piece of paper increasingly valuable in the ever-growing, billion-dollar, highly competitive scooter rental business — that permit comes with caveats.
“I consent to the transfer on the condition that Scoot, as a subsidiary of Bird, comply with all of the following,” Reiskin wrote in his letter to Scoot and Bird.
Those conditions include providing a signed and authenticated document describing the “transactional relationship” between Bird and Scoot, abiding by all terms and conditions of the Scooter Permit and Moped Permit (Scoot also operates mopeds), paying The City any outstanding balances from Scoot in its permit programs, and meeting the “high standards” committed to in Scoot’s Powered Scooter Share permit application.
Among the conditions SFMTA asked of Bird is one Scoot employees may be celebrating: Reiskin told Bird it must maintain the “same or greater number of employees that Scoot has employed during the pilot” to also operate at the “same or higher” compensation, including benefits, and to maintain Scoot’s commitment to labor harmony in San Francisco.
Founder and CEO of Bird Rides Travis VanderZanden signed that agreement, as did Michael Keating, founder and president of Scoot Networks, according to the SFMTA letter obtained by the Examiner.
“We are thrilled to welcome Scoot to the Bird ecosystem and look forward to working with the Scoot team as we further scale our complementary missions – to replace car trips with micro-mobility options for all,” said VanderZanden, in a statement. “Together we will make a bigger impact on our riders’ daily lives and the cities we serve.”