Lime is pulling its scooter business out of Tempe because of regulations and what it calls the highest cost of doing business in the country.
Lime is among several electric scooter companies that descended on Tempe in recent months, creating problems along with a new option for transportation. The two-wheeled, phone-activated scooters have been immensely popular, especially with college students, but they've also caused chaos and problems that led to a ban by Arizona State University.
A February 11 goodbye letter (see below) to Tempe highlights the other side of the issue: Lime claims it's being driven out of the city by onerous rules and a steep license fee.
The city passed rules about a month ago to help control the onslaught of scooters, which have also included the brand names of Razor, Bird, and others. Applications for the new required licenses were due today, said a Lime spokesperson, leading to today's decision to pull out.
Lime will collect its scooters from the city immediately, with none likely being available starting on Tuesday. However, Lime will still be offered in nearby areas of other cities, the spokesperson said.
"Tempe has made it a little too hard for companies to do business in the city," the spokesperson said.
The new Tempe license "requires each company to pay $1.06 per scooter per day. At $386.90 per vehicle per year, the cost of doing business in Tempe would become one of the highest in the country. It eclipses the per vehicle fees in cities of all sizes, including Los Angeles, Tacoma, Austin, Lubbock, Boise, etc. Scottsdale’s ordinance, as you know, requires no fee to operate," Lime told Tempe officials in the letter.
The company also emailed the letter to Phoenix New Times and other media outlets. "The current fee is approximately 20 times more costly per mile than cars are taxed, minimizing the social, economic and environmental benefits of shared vehicles."
The company also balked at a new regulation that requires riders to admit they know riding scooters is an "inherently hazardous" activity, which Lime claims is a designation usually reserved for public fireworks or "radioactive materials."
The company has a problem with language in the license that holds the city blameless even if a problem resulted from the city's failure to maintain "safe" streets and sidewalks, the letter indicates.
However, a spokesperson couldn't say whether Lime feels that cities should be responsible for injuries on scooters that may stem from a defect in a street or sidewalk.
Lime said it hopes to return to the city — which sounded more like an attempt at leverage. If other scooter companies threaten to leave Tempe, maybe the city will have to change its policy.
"I'm very sad to see Lime leave," Tempe Councilman Kolby Granville tweeted on Monday evening. "I love the scooters, and I love having Lime in the city. The goal of regulation, of course, is not to drive the scooters out of the city, but to allow us to mitigate the secondary negative effects they cause. In short, they have to pay some of the costs of the problems they are creating. I wish them well in other cities, and look forward to the day they return to Tempe."
City of Tempe officials later released the following statement about Lime's move:
"Since Tempe City Council passed the Shared Active Transportation Vehicle license on Jan. 10, the city has received two applications, both of which are in review and currently pending. Although Lime chose to be a part of the stakeholder process, they have chosen not to apply for a license. While we regret that Lime feels they are unable to operate in Tempe under the current license conditions, the city does believe the insurance, fees and other requirements are fair and necessary to ensure the scooter companies operate in a way that ensures community safety and equal access.
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"The license requires a per vehicle per day fee for use of the right of way. Revenue from this fee will be used to ensure Tempe’s streets and sidewalks are safe for all users by targeting safety outreach messages and Police Department education and enforcement. These funds could also be used to help improve Tempe sidewalks and streets, as well as fund future bicycle and pedestrian projects.
"The SATV license is a work in progress. We will continue to monitor and evaluate the success of the license and we will continue to work with stakeholders to ensure we are offering a safe, equitable and sustainable modes of transportation within the city."
(UPDATE: The city of Tempe responded at about 8 p.m. to a request for comment. This article has been updated with the above comment.)