Dockless scooter giant, Lime, is leaving San Diego. Here’s why

Lime scooters parked along Third Avenue in downtown Chula Vista. Lime scooters is leaving because of increased regulations in San Diego.
Lime scooters parked along Third Avenue in downtown Chula Vista. Lime scooters is leaving because of increased regulations in San Diego.
(Nelvin C. Cepeda/The San Diego Union-Tribune)

Just weeks after San Diego City Council banned e-scooters from popular beach spots, one of the biggest players in the industry is withdrawing from the market altogether.

Lime, which was the first e-scooter operator to launch in San Diego in early 2018, is pulling all 4,500 of its scooters from the city, which started Thursday. They will join Uber’s Jump and San Francisco-based Skip, which both recently exited San Diego complaining about city regulations.

Lime is citing too much red tape, declining ridership and a need to cut costs.

“As part of our path to profitability, Lime has made the difficult decision to exit San Diego and focus our resources on markets that allow us to meet our ambitious goals for 2020,” said Brad Bao, co-founder and CEO of Lime, in an emailed statement. “We appreciate the partnership we’ve enjoyed with San Diego and remain hopeful we can reintroduce Lime back into the community when the time is right.”

San Diego is not alone in this Lime retreat. The company is also exiting 11 other markets and laying off 14 percent of its workers (about 100 people). In the U.S., Lime is leaving Atlanta, Phoenix, San Diego and San Antonio. But the company still operates in 120 markets worldwide.

A Lime spokesperson said the company has faced a series of hurdles in San Diego, which together have prompted Lime to exit.

For up-and-coming scooter companies, San Diego was once one of the hottest cities to enter. The region’s year-round good weather, highly populated tourist spots and hands-off government made it a prime destination. In a matter of months, the city’s downtown and beach areas were overrun with electric bikes and scooters on every corner. The devices began encroaching on public and private spots, pushing a local towing company to start impounding errant scooters. Meanwhile, scooter injuries and concerns over safety inspired passionate critics to organize and make their complaints known to city leaders.

San Diego, some feared, had become a Wild West of dockless equipment. When the New York Times did a story on the topic, it carried this headline: “Welcome to San Diego. Don’t Mind the Scooters.” And when Seattle started considering its own regulation for scooters, they sent a TV station crew here for a “what not to do” piece.

Local government responded.

Last summer, the city rolled out new regulations on scooter companies, instituting speed limits in popular tourist areas and rules on where scooters can be staged, among other changes. The new rules were followed by a sharp decline in all e-scooter ridership citywide. From July to December, the number of trips using shared-mobility devices dropped by 75 percent — with rides taken over a two-week time frame going from 441,830 down to 110,009, according to data provided by the city. It was unclear whether the rules impacted the dropoff in ridership, or if the decline was more tied to seasonality.

Then last month, the San Diego City Council took it a step further, banning all e-scooters and e-bikes from the boardwalk from Mission Beach to La Jolla.

For Lime, this move"significantly impacted ridership” in San Diego, the company’s spokesperson said.

Scott Robinson, a senior public information officer at the City of San Diego, provided the Union-Tribune with the following statement:

“We respect Lime’s business decision, and remain committed to supporting this emerging industry as a low-cost, environmentally-friendly transportation option,” Robinson wrote in an email. “San Diego’s top priority is public safety, and in order for this industry to succeed doing business on our streets, compliance with regulations that hold operators accountable and prioritizes rider safety will always come first. We continue to work directly with operators like Lime to modify regulations so that these priorities can co-exist responsibly.”

While several scooter and bike companies continue to hold permits to operate in San Diego, several of the players have collected their equipment and left town. Uber’s Jump bikes and Skip’s scooters left in September.

The exiting scooter and bike companies — Lime included — have grumbled over San Diego’s policies around impounding devices. The city reserves the right to seize parked scooters for several reasons, from obstructing car traffic to clogging sidewalks to blocking ramps for the disabled. It collected roughly a quarter-million dollars in fees as a result of impounding more than 3,700 vehicles, as of October.

A Lime spokesperson said the company wants more transparency from San Diego officials.

“We’re not given a reason why (our products) are impounded, nor a notification that it happened,” the spokesperson said. “Then there’s no ability for us to go back and update the user on what they did wrong. We have to pay a fine and we’re told we’re improper.”

Lime said this lack of transparency is unique to San Diego. “We don’t experience that in other markets.”

The company started shutting shut down its local operations Thursday, withdrawing all of its scooters and closing down its 33,000-square-foot warehouse in Old Town. Lime was unable to give an exact date the scooters would be removed from the streets altogether.

The remaining e-scooter operators in San Diego include Bird, Lyft and Spin. The remaining e-bike company is Wheels.