Denver’s scooter deal with Lyft, Lime moves forward despite concerns

This story first ran on BusinessDen.com, a BizWest news partner.

DENVER — A proposal to give two companies the exclusive right to place electric scooters and bikes in Denver moved past a City Council committee in its third try on Tuesday — despite the fact that no changes were made to address council members’ concerns.

The city has proposed five-year contracts with Lyft and Lime, a move that would ban companies like Bird and its brethren. The two companies would pay zero dollars; but they would be required to comply with rules on the distribution of scooters around the city, free rides for certain demographics and parking.

Despite passionately expressed concerns about the length of the contract, the level of exclusivity and the veracity of assurances that the scooter littering problem will improve, the council as a whole will soon decide whether the two companies become the sole providers of shared scooters and bikes in the city until at least 2026.

The council’s Land Use, Transportation and Infrastructure Committee, which previously discussed the deal in two late March meetings, voted 5-2 to move the proposal forward.

Councilwomen Candi CdeBaca and Amanda Sandoval were the two votes against. CdeBaca noted that city staff had not made any changes to the deal following the previous meetings.

“I expected you to come back to us with something different based on the feedback, and not seeing anything different makes me reluctant to say — if it wasn’t ready last time, and nothing changed this time, it’s where it was when we said it wasn’t ready last time,” CdeBaca said.

“I think we’ve said several times there are things we take issue with,” she added. “We’re concerned with the length of the contract. We’re concerned with the fact it allows only two providers. The fact that it comes with no real enforcement plan.”

Council members did have access to the actual contracts this time around. In the second committee meeting addressing the subject, Sandoval had said she’d asked for them and been denied.

Still, Sandoval criticized Department of Transportation and Infrastructure staff for how they’d gathered data related to distribution plans, balked at the suggestion that the city wasn’t subsidizing the program by giving free access to the city right-of-way, and questioned why the contract was so long compared to other cities, many of which are only locked into one- or two-year contracts.

The five-year contract length is longer than the scooter industry has existed.

“I have a lot of concerns about tying ourselves to something for five years when the technology is ever-changing,” Sandoval said. “I remember nine years ago, B-Cycle was the big thing. We did all this investment, thought it’d be around. Well guess what, it’s not around anymore. We lost a lot of money on it.”

Sandoval also continued to voice her concern that backers of the chosen two companies are predominantly in the car business. Lyft is a wing of the ride-booking provider of the same name, while Lime counts Uber among its main shareholders and advertises that company on the side of its vehicles.

Along with Lyft and Lime, Spin and Bird also applied to the city for the licenses. When council members expressed concerns last month, Spin invited them and city staff to come test out its scooters — an apparent attempt to revive its bid that ended with no council members and no city staff showing up.

“The competitive process is already complete, and we’re moving licenses for Lyft and Lime through the council process,” DOTI spokesperson Heather Burke-Bellile said in an email to BusinessDen.

Burke-Bellile also said that the city only negotiated with Lyft and Lime, after determining their initial proposals were the best.

“The tug of war was between how much we could extract and how many operators we could have,” said Stephen Rijo of DOTI Tuesday, who will be the primary project manager of the shared micromobility program for the department. “A lot prefer to be the only one. We didn’t think that was best. But as you continue adding more operators, it dilutes the value that the city can extract. We felt two was the sweet spot.”

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