Razor, Lime will pull scooters out of Tempe due to conflict with new fees

PHOENIX — One scooter company said it is pulling out of Tempe, and another is threatening to follow in response to the city’s strict new regulations on their industry.

Razor released a letter to the city Wednesday that said if the rules stay as they are, the company will no longer serve Tempe beyond the next 30 to 60 days.

A day earlier, Lime said in a letter to the city that it was discontinuing operations immediately.

“The city’s new license agreement, as currently written, seriously threatens our ability to continue operating in Tempe,” Razor’s letter stated.

Tempe City Council voted unanimously on Jan. 10 to establish a nearly $8,000 annual licensing fee and a daily fee of $1.06 per vehicle.

“The daily $1.06 per vehicle fee is, without exaggeration, orders of magnitude higher than any other market in which we currently operate or are planning to operate,” Razor’s letter stated.

Razor warned Tempe that while some companies may continue operations in the city under the new rules, it is likely that they will all eventually be forced out due to the financial burden, as Lime said it was.

“Given our strong relationship with the Tempe community and growing rider demand in the city, it is with great disappointment that we have made the difficult decision to pull scooters out of the city at this time,” Lime’s letter stated.

Lime echoed Razor’s charge that the new fees are much higher than in other markets.

“At $386.90 per vehicle per year, the cost of doing business in Tempe would become one of the highest in the country,” Lime’s letter stated.

“It eclipses the per vehicle fees in cities of all sizes, including Los Angeles, Tacoma, Austin, Lubbock, Boise, etc.”

The letter also pointed out that Scottsdale does not currently charge operating fees.

After a conflict with Bird scooters in early 2018, the city created a set of rules for the devices but did not require companies to apply for a license.

Both companies said they took issue with Tempe’s stance on liability, with Lime calling it an “unprecedented overreach.”

“The Tempe liability requirements go beyond those in other cities by forcing operators to take on risk well beyond their control and outside the scope of its business operations, such as indemnifying the city’s own conduct in maintaining roads or sidewalks in safe condition,” Lime’s letter stated.

They both also said they were open to continuing working with the city to come to an agreement.

The city of Tempe said in an emailed statement Tuesday that it reaffirms its commitment to the fees:

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.

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 city said its license is a “work in progress,” and it will continue to monitor and evaluate its success.