Banned Scooter Company Bird Buys Way Back Into S.F.

Bird acquires Scoot — who have a permit to operate in San Francisco — in an apparently successful move to skirt the city’s strict scooter code.

The San Francisco scooter wars hit a temporary truce last year, after the SFMTA granted only two scooter operation permits to relatively small industry players Scoot and Skip. Billion-dollar competitor Bird was denied that precious permit in light of their aggressive, illegal rollout, but last month tried out a loophole to get back in the S.F. scooter game by introducing out a somehow-legally-different monthly rental program (which is still stuck in waitlist mode).

But Bird has found a bigger and better loophole, as the SF Examiner reports. Bird has acquired Scoot and now has conditional permission to rent scooters in the city.

Terms of the deal were not included in Scoot’s announcement of the acquisition, though the Wall Street Journal estimates the deal at $25 million — substantially lower than Scoot’s last-known valuation of $71 million. In other words, Bird made a killing.

But San Franciscans probably care more about the precedent of whether banned companies can buy their way back to legal status. When rumors of this deal appeared on TechCrunch last week, there were questions whether the SFMTA would grant Bird permission to operate. Based on the above letter from SFMTA director Ed Reiskin they appear to have granted that permission, albeit with conditions.

“I consent to the transfer on the condition that Scoot, as a subsidiary of Bird, comply with all of the following,” Reiskin wrote, then rattled off a series of demands around financial documents, administrative fees, safety rules, and hiring requirements. Scoot also operates moped rentals, for which they must comply with similar regulations.  

So it looks like Bird has flown over regulators’ heads by making a backdoor acquisition of a company that has the very permit which they’d been denied. If that makes your blood boil, take a deep breath.

TechCrunch reported last week that Uber “could also be in the works” of acquiring Skip, the only other city-permitted scooter company. Uber had previously bought up JUMP Bikes, who held the city’s only permit for dockless electric bikes. Lyft, who now own Ford GoBikes, is changing that operation’s name to Bay Wheels and suing San Francisco to block bikeshare competitors from getting permits.

So expect a new phase in the big-bucks bike and scooter battles, one marked by lawsuits, acquisitions, and strategic name-changes. But don’t expect to hear about any profits, because somehow none of these companies have figured out how to make money.

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