San Diego is kicking out its first bike-sharing company, DiscoverBike, after finding the company in breach of its contract. The company has until April 6 to pack up its equipment and leave the city.
The city sent a letter dated Feb. 5 to the company's president, Ricardo Pierdant, informing him of the city's decision to terminate their agreement. The letter does not specify how the company breached the contract, but says the breach "has been extensively documented and was mediated on December 5, 2018."
The agreement was approved in 2013 and placed a number of requirements on DiscoverBike, originally called DecoBike, including the regular maintenance of the bikes and docking stations. City spokeswoman Alma Rife said the city had documented complaints from users who were unable to unlock bikes at stations. Docking stations can often be found empty with no bikes available, or full with no spots to return a rented bike.
Rife said the city is still reviewing its options for what to do with the curb space currently occupied by the docking stations. Last month, the city painted its first designated street parking space for dockless scooters and bikes, and officials say more are coming.
DiscoverBike has had a troubled history in San Diego. Its first stations opened in January 2015 after more than a year of delays. Then a 2016 San Diego County Grand Jury report found the company had struggled to broaden its appeal beyond tourists to include everyday commuters. The original intent of the program was to help the city shift commutes away from cars and provide faster connections to public transit hubs.
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David Silverman, DiscoverBike's vice president of operations, said the city required an extensive community review process for siting the docking stations — something that was never required of the dockless bike- and scooter-sharing companies that began appearing in San Diego last year. He said the city had misled the company and promised it would be able to place docking stations in high-traffic tourist areas such as beaches and parks, but that those promises were never kept.
"They just kind of strung us along and told us we were going to get La Jolla, told us we were going to get these other areas," he said. "The few that they did give they ended up having us remove."
Regarding the reports of malfunctions, some of which are documented on the company's Yelp page, Silverman said the company had followed the maintenance procedures outlined in the contract.
"No system works 100 percent of the time," he said. "There are people who don't follow directions and don't speak the language or can't read."
The explosion of dockless bike- and scooter-sharing companies such as Bird, Lime and Jump may have been the nail in DiscoverBike's coffin. While those companies' devices can generally be ridden and parked directly at a user's destination, DiscoverBike bikes have to be returned to a fixed docking station.
Price competition also likely impacted the company: DiscoverBike's cheapest rental option is $5 for a 30-minute ride, while dockless scooters or bikes can be rented for shorter stints of time at a lower cost.
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The city's 10-year exclusive contract with DiscoverBike ironically became a source of the company's struggles. The City Attorney's Office issued a memo in January 2018 stating while DiscoverBike was the city's "exclusive corporate partner as a bike sharing company," the contract did not preclude the city from regulating competing dockless bike- or scooter-sharing companies or issuing permits for them to operate.
The contract did, however, prohibit the city from promoting or cooperating with any bike-sharing company other than DiscoverBike. City lawyers said this meant the city had to permit all of DiscoverBike's dockless rivals to avoid playing favorites. San Diego is now one of the most crowded markets for dockless bike- and scooter-sharing in the country, with at least six companies competing for customers.
Mayor Kevin Faulconer has proposed a set of regulations for dockless bike- and scooter-sharing companies, including new fees and limits to how many devices the companies can stage in groups. A City Council committee gave its approval with some suggested amendments last month. The proposal now awaits a hearing at the full council.
Andy Hanshaw, executive director of the San Diego County Bicycle Coalition, said it was unfortunate that DiscoverBike faced so many challenges — all of which were compounded by the city's lack of a connected network of safe, comfortable bike lanes.
"Dockless mobility options have made it much easier and affordable for users to access bikes and scooters," he said. "We must continue to implement and accelerate our planned bicycle network to give people the safe options they want in order to choose to ride bikes more and drive less."
