Chinese Company's Plan for Bike Sharing in San Francisco Faces Pushback

What could go wrong with a tech company's plan to place hundreds or perhaps thousands of shared bikes around San Francisco, the nation's second-most-bike-friendly city?

China-based Bluegogo, which has reportedly scooped up $34 million in startup funds, appears ready to begin deploying its blue aluminum bikes in popular neighborhoods around San Francisco.

Unlike the Bay Area's public bike-share system -- which plans to begin expanding this year from 700 to 7,000 bikes -- Bluegogo's bikes don't need docking stations. Bluegogo says it will place its bikes only where bicycles may be legally parked and that users will be instructed to do the same.

But San Francisco city officials, led by Supervisor Aaron Peskin, have painted a scenario in which abandoned Bluegogo bikes could wind up piled on city sidewalks and other public spaces. At a City Hall press conference on Wednesday, blow-up photos showing a mess of abandoned shared bikes in China were displayed.

"Bluegogo is just another example of the tech arrogance that has gotten everybody from Airbnb to Uber in trouble,” said Peskin. “San Francisco has historically been known for its welcome mat, but in recent years we’ve let ourselves become a doormat. It’s time to put the public’s interests first, even if that means disrupting the disrupters.”

Peskin, joined by Supervisor Mark Farrell and Brian Wiedenmeier, the executive director of the San Francisco Bicycle Coalition, vowed to introduce legislation "prohibiting the unpermitted use of the public realm as a distribution platform for private bike-share corporations and other unregulated 'sharing economy' schemes."

A Jan. 16 letter to Bluegogo from Ed Reiskin, head of the Municipal Transportation Agency, and Mohammed Nuru, director of Public Works, asked the company to provide its business plan, show it has obtained a city business license, and confirm that its operations would not interfere with the city's exclusive contract with Bay Area Motivate LLC, which operates Bay Area BikeShare, soon to become Ford GoBike.

The exclusive bike-share contract contains just three exceptions: traditional bike-rental operations, electric scooter sharing, and automated round-trip bike sharing -- systems that require users to return bicycles to the site where they're rented.

The city letter warns that if Bluegogo's business violated that contract provision, the city may withhold permits and could take legal action against the company.

Of equal concern, the letter said, was the company's use of public sidewalks and streets.

"To the extent that your shared bicycles will occupy the public right of way, we require they do so in compliance with local law and in a manner that does not constitute a public nuisance or public safety hazard," the letter said.

Rachel Gordon, a spokeswoman for San Francisco Public Works, said the department has the authority to remove the bikes if they become a hazard.

In an interview, Ilya Movshovich, Bluegogo's vice president of U.S. operations, said considering that San Francisco is "a bike city," Bluegogo was shocked to see the pushback from city officials.

"We're still happy to be cooperative and collaborative," he said.

In an email to SFMTA officials dated Jan. 2 and provided by Bluegogo, Movshovich wrote to Luis Montoya, the head of the SFMTA's livable streets program. He inquired about what permits the company might need and shared some general information about the company's planned operation.

"I understand that according to California law, we can't drop our bikes in positions that would disrupt an adequate path for pedestrian traffic. We don't intend to do that. We also have a system in place to monitor, review and reward/penalize users for bicycle placement behavior."

Movshovich wrote that the company would charge a $99 deposit that "would hedge against damaged bikes or if the user is irresponsible with bike placement or any actions that would jeopardize the safety of others -- they would get assessed a warning, and possibly a fine."

Bluegogo says it plans to charge 99 cents for every 30 minutes, along with the $99 deposit. The cheapest Bay Area BikeShare membership is $9 for 24 hours, a charge that provides unlimited rides up to 30 minutes each; rides of 30 to 60 minutes incur a $4 overage fee; rides over 60 minutes cost $7 for each additional half-hour.

Users can locate a bike with the Bluegogo app, reserve it and have about 15 minutes to pick it up before the reservation expires. The bikes weigh 33 pounds and come equipped with airless tires, so users don't have to worry about flats.

"The beauty is the fact that we don't have docking stations, which makes us special and unique in this market," said Movshovich, who is also co-founder of the shared-parking startup CARMAnation. "It's more likely that people are going to be using the bikes when it's a couple of steps from them as opposed to a couple of blocks. We bring easier access."

Movshovich wouldn't talk numbers, neither confirming the amount of funding the company has raised nor the number of bikes the company plans to deploy around the city. But he said it's nowhere near 10,000 to 20,000, as some have speculated. The company can scale up or down depending on the demand, he said.