Scooter-sharing startups are running into trouble with city officials around the country who are regulating their rapid growth after experiences with crowded sidewalks and abandoned electric scooters, the Wall Street Journal reported.
The thinking seems to be to capture early market share by flooding cities with the electric scooters.
Such startups as Bird Rides Inc. and Lime have been the recent darlings of investors as the companies rush to fill city streets with scooters, the newspaper said.
Pitchbook reported in April that Bird, started by a former Lyft and Uber executive, raised $118 million in venture capital funding to provide dockless scooters in various cities where users can rent them through an app.
Investors have valued Bird at $2 billion and Lime at $1.1 billion, the two fastest U.S. startups to pass a $1 billion valuation, the Journal said.
City officials, though, have become angry about the aftermath, with scooters being abandoned in various locations in Santa Monica, California, San Francisco and Austin, Texas earlier this year, Pitchbook said.
In response, urban municipalities from Miami to Portland, Oregon have capped the number of scooters each company can have and in other cases, cities have stopped the scooter deployments altogether, the Journal said.
At least seven cities have impounded scooters until city official establish regulations. Miami and Indianapolis officials have sent cease and desist letters to the companies to stop deployments as they debate regulations.
Denver officials impounded scooters there and then drafted legislation limiting share companies to 250 scooters each, the Journal said.
In China, dockless bike shares have led to crowded sidewalks, even with users dumping discarded bikes in rivers, said Susan Shaheen, a professor at University of California Berkeley who studies transportation.
"(Cities are saying) we need to have more control over what's happening on the streets because of past experience and lessons learned," Shaheen told the Journal.
Emily Warren, Lime's policy director, told the Journal that while it is understandable that cities would want to make sure users keep sidewalks clean and safe, and companies accountable, putting caps on their company "is just not the only way, or best way, to accomplish that."
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