San Francisco denies scooter permits to big players, picks Scoot, Skip

Justin Sullivan | Getty Images

Bird and Lime scooters sit parked in front of a building on April 17, 2018 in San Francisco, California.

The city of San Francisco announced it’s granting scooter permits to small start-ups Scoot and Skip, shutting out well-funded hometown businesses including Uber, Bird, Lime and Lyft.

The move comes after San Francisco banned the scooter companies from operating without a permit earlier this year, after scooters from several providers, including Bird, Lime, Spin and others, flooded the streets.

After ride hailing companies trounced the entrenched taxi industry, venture firms rushed to fund scooter start-ups, pumping up valuations in this mobility niche. For example, Lime and Bird are now worth more than $1 billion on-paper, to the disbelief of many Silicon Valley observers. But their success in “last-mile” transportation is still untested.

Companies that offer electric scooters and bike sharing services are now in a race to grow their operations across the U.S. Cities like San Francisco, where the weather is mild and residents can make use of bikes and scooters all year, are especially appealing.

In a statement, Sanjay Dastoor, CEO and co-founder of Skip said: “Investing in the city — including bike lane infrastructure and job training — is a commitment we made in our San Francisco permit application. We’re glad to see others in the industry following our lead and look forward to making the success of shared electric mobility something that we can all be a part of.”

Venture investor Shawn Carolan, whose firm Menlo Ventures backed Uber, Skip and the bikesharing start-up Jump (now a division of Uber) said: “I’m so pleased to see San Francisco work closely with companies to solve ‘the last mile’ problem. There are huge benefits if the city gets it right: Innovation from new transportation startups can create jobs, reduce traffic, and benefit the environment while driving productivity.”

For Bird, it wasn’t all bad news today. The electric scooter-rental business won a permit to operate in another California hotspot, Santa Monica, today.