West Hollywood has a message for Bird and its scooters: Fly away.
City Hall is recommending that Bird’s contract — which permits the company to offer rental electric scooters as part of the city’s much-hated Dockless Micromobility Pilot Program — not be renewed when it expires on March 31. Bird and its rival, Lime, are the only two scooter companies with city contracts.
The decision is a direct response to Bird’s bankruptcy announcement at the end of 2023.
In an effort to refine the initial pilot program, city officials and representatives from Bird and Lime had participated in crafting the Second Phase Agreement, an updated framework that sought to ameliorate community concerns by imposing stricter compliance and risk mitigation measures on the operators. These included enhanced insurance requirements, indemnity clauses and penalties designed to safeguard the city’s interests and public welfare. The second phase is set to last 18 months.
Following months of extensive negotiations, City Council on December 18 allowed the Dockless Micromobility Program to advance into its second phase.
Two days later, on December 20, Bird filed for bankruptcy, blindsiding the city and raising significant concerns about the company’s capacity to fulfill its enhanced contractual obligations. Bird’s failure to pre-emptively notify the city of its financial jeopardy, particularly amidst ongoing contract negotiations, prompted immediate scrutiny by the City Clerk’s Office and the City Attorney.
Upon reviewing the bankruptcy filings, city staff concluded that Bird’s precarious financial state posed too great a risk. They are now advising City Council against finalizing the Second Phase Agreement with the company. The uncertainty surrounding Bird’s ability to adhere to the elevated requirements and the potential for costly legal entanglements in the bankruptcy proceedings underscored this recommendation.
However, the city has successfully cemented its Second Phase Agreement with Lime, effective April 1, 2024. This accord permits the deployment of up to 200 scooters and 50 e-bikes citywide, incorporating a new provision that mandates preemptive bankruptcy disclosures, aiming to avert future surprises. The city has not ruled out working with Bird again should its situation stabilize.
Since their introduction in West Hollywood more than five years ago, the fleets of electric scooters made and managed by Bird, Lime and other manufacturers have created a litany of havoc for pedestrians and motorists as they trailblazed this novel form of transportation.