Austin City Council still unsure whether to place franchise requirements on dockless scooter, bike companies

Austin City Hall

Austin City Hall

If Austin’s electric scooter and dockless bike sharing providers are placed under proposed franchise rules, the right of any new company to open up shop and provide an alternative to existing options would be subject to City Council approval.

The city manager would also have to recommend City Council approve the company after the company proved that its service was necessary and “convenient” for Austinites.

Although the franchise fees imposed on the companies would allow Austin to make more significant investments in public right of way infrastructure and the franchise agreements would let government have more say in the design and safety of the devices, a few council members expressed concern the move would needlessly inject politics into and limit innovation in what has otherwise been a healthy, free market.

City Council decided it was not ready to make a call on requiring franchises for the micro-mobility companies and postponed the May 23 vote to August 8.

District 6 Council Member Jimmy Flannigan led the push for a postponement, saying a franchise requirement would bring politics into something that should be decided by free market competition. He said under the proposed rules, if a local startup wanted to join the micro-mobility fray, the well-established companies could lobby City Council members to vote against the company—something he referred to as unnecessary politics.

Resident Dan Keshet told City Council they would grow more tired of anyone from the franchise model because of all the bureaucracy it would create.

Under the proposed rules, any new company wanting to enter the Austin micro-mobility market would need to “demonstrate [to the city manager and City Council] the public necessity and convenience for the … micro-mobility service franchise.”

The ordinance was also unclear whether existing companies that wanted to make significant changes to its service would need to apply for a new franchise license. Critics said this would hurt innovation in the local industry.

“The franchise system is a law meant to slow change, discourage competition and decrease availability throughout the city,” said Josiah Stevenson of local advocacy group AURA. “The plain wording of the staff recommendation and the written ordinance makes clear that its purpose is to place barriers in the way of competition, choose winners and losers, and reduce micro-mobility choice and availability for consumers.”

Bianca Laborde, the public government relations specialist with Bird, one of the largest scooter operators in the city, said Bird could not support the franchise requirement as written. She said the rules would significantly change micro-mobility in Austin and the city needed more nimble and flexible rules that inspire and encourage competition.
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