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Abu Dhabi, UAESaturday 20 October 2018

$1bn scooter startup Lime sidelined as competition takes to San Francisco streets

Lime lost its bid for a court order banning two smaller companies from operating after the city denied Lime a permit

San Francisco requires permits for scooters after the city was overrun in the increasingly crowded scooter startup market. Bloomberg
San Francisco requires permits for scooters after the city was overrun in the increasingly crowded scooter startup market. Bloomberg

Lime, the electric scooter company valued at a $1 billion (Dh3.6bn), lost its bid for a court order temporarily halting San Francisco’s plan to let two smaller companies operate after the city denied Lime a permit.

But to Lime, a court decision Friday not to block the city from launching its pilot program on Monday wasn’t all bad. The judge wants to “get to the bottom of what happened” in the permit process and is letting Lime question officials at San Francisco’s transportation agency, according to the company.

Lime accused the city in a lawsuit filed Thursday of denying the startup permission to operate as punishment for deploying its scooters on city sidewalks earlier in the year without approval from regulators.

John Cote, a spokesman for San Francisco City Attorney Dennis Herrera, said the permit process for the pilot program is “both fair and transparent” and that “the reality is that Lime’s application fell notably short of its competitors”.

“San Franciscans deserve scooter services that are safe, equitable and accountable, which is exactly what this pilot program was designed to do,” he said.

Calling Friday’s court hearing “a victory for the people of San Francisco and Lime,” the company said it won the judge’s permission to take depositions in the coming week of five officials at the San Francisco Municipal Transportation Authority. It said there will be another hearing in November, “where the SFMTA will be required to answer to the people of San Francisco, and explain exactly what happened in the SFMTA’s biased selection process”.

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Lime, which has financial backing from Uber and Alphabet, and rival Bird Rides, valued at $2 billion, are the leaders of a newly crowded field of electric mobility companies. Together Lime and Bird have launched scooter-rental services in more than 100 cities. Both are based in California, and each expects San Francisco to be an extremely valuable market for scooters.

Lime, Bird and a third company, Spin, began renting scooters in the city this year and pulled them from the streets this summer when the city passed a law requiring electric scooters to have permits. All three applied for and were denied permits, but the city awarded permits to two smaller startups.

Lime has repeatedly said it is one of the largest and most experienced companies in the industry, and therefore equipped to provide the best service.