The San Antonio City Council set out to select three out of nine scooter companies to operate in the Alamo City as early as Oct. 1. But the selection has not yet been made. So now what?
"Morning Edition" host Norma Martinez sat down with TPR technology reporter Paul Flahive to figure out what happens next, and she asked him that very question.
PF: Well, city staff explained to me the Oct. 1 date was always an estimate — back in May — based on where they thought the request for proposals process would be, along with council action. They're all subject to schedules and of a lot of different people. Long story short, the city hasn't made the recommendations yet, and it will be a while before the council decides.
NM: So, how far away are we from knowing who won those contracts and who gets to operate in San Antonio?
PF: City staff expects to make recommendations later this month, maybe even early November. It'll go to B-session before a vote, meaning it will likely be November before anything passes the council. So, council can either approve the three companies the staff recommend, they can pick their own, or they can pick a different number of companies. It’s really up in the air about just exactly who will be operating here.
NM: So, we mentioned there are nine companies in the mix, which are those nine?
PF: There are nine companies vying for the three permits: Lyft, Bird, Lime, Ojo Electric, Razor, Spin, VioRide, Frog Scooters, and Wheels Labs. Five of them currently operate in San Antonio already, and a couple of them operate in Austin.
NM: So, all in all, we won't be seeing a reduction in scooters once we slim down or will we?
PF: That's a great question. When this passed there was concern from at least one council person that going down to the 5,000 scooter limit — which is what city staff are recommending — wouldn't actually bring down the total numbers in this city that much. While we've seen 14,100 scooters permitted to seven or eight companies, it's actually only about 5,600 per day where ever deployed, according to this city's pilot study.
So, when we do pass this, they'll reduce to 5,000, they'll reduce to three companies, but will that actually be felt on the city streets? It's hard to say. And just in terms of when we'll actually see that reduction, it won't be the moment that they pass it. The city has said that they will allow 30 days from the moment it passes, from the contracts being awarded, for those companies that don't win to reduce their scooters stocks here. So we're looking at almost December, possibly even later, before anything actually starts to reduce.
NM: Now, could this be good news for the only local scooter company? Because you broke a story about Blue Duck scooters having missed out on a deadline to apply for the city contract.
PF: That's right, we reported a couple of times on Blue Duck before this incident, and it's not clear if this is good news or bad news for them. They're currently disputing the city's finding that they didn't respond to their RFP in time, and they've threatened legal action, according to other media outlets. They’re a company founded by father and son Paul and Eric Bell back in March 2018, initially funded by the Bells, and it's not clear whether or not this is good or bad for them, but it's probably doesn't really affect them that much.
NM: So what else in your reporting did you uncover about Blue Duck?
PF: Well, since it was the only local company, we had been interested in them for a long time.
The company struggled early to source scooters and also with vendors developing the software. They successfully raised millions [of dollars] last year, and then they took a big loan from David Strauss Jr., a Tampa billionaire — who unsuccessfully ran for mayor of that city this year. Strauss, through his foundation, gave about $6 million to a Dallas company, the Blue Scooter Servicing Company, that then lent $5 million of it to Blue Duck, initially, with the promise of making more than $11 million back.
So, that's kind of the good news about the company — they were able to really get some momentum behind their fundraising, but they had trouble executing on their vision.
The company struggled to launch markets, to find scooters that they felt were quality scooters, with staffing, and with executives. Current and former employees don't describe the workplace in positive terms, some calling it toxic, and over the last year, as a result of these struggles, 20 employees or contractors have either resigned or been terminated just since February. The company usually has around 25 to 30 total, so it's a large churn on its workers.
NM: So, who do you foresee getting these contracts, and would Blue Duck have a chance of getting added back in?
PF: Yeah, that's the big question. Undoubtedly Blue Duck, being a local company, would have received extra points on their RFP response, but it currently isn't being considered, and it doesn't appear they will be.
Anything can happen. The council can make some choices, and city staff can revise how they went about determining who was allowed in, but that doesn't appear to be the case. As for the rest, you're talking about some very small companies going up against some very big companies, like Ford-backed Spin and Lyft, which is backed by the same ride-hailing company. So, it's a real question mark as to who's going to end up operating in San Antonio. I would imagine it would be some mix of the large and small.