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> And like Ford GoBike — which currently has an exclusive contract with San Jose to operate a docked bike sharing program in the city — the city says scooter companies should be required to offer discounts to low-income residents and operate in what it calls “communities of concern.”

Ironically, this is exactly what caused the current de facto local monopolies for broadband. Until Congress made the practice illegal in 1992, cities would grant legal monopolies in exchange for funding various community access channels, serving all neighborhoods, and offering a basic tier of service at very low, regulated prices. The legal monopolies are gone, but the effects of that municial-government idiocy persist to this day.

Cities love granting monopolies in exchange for various concessions, because it’s free money to them. The citizens are taxed indirectly through suppression of competition. It’s a practice that is well-intentioned but misguided. Cities do it because it hides the cost from residents. But it also hides the cost from the government—they have no idea how much extra their residents will pay to secure these social benefits.

How else do you handle natural monopolies? Obviously the best solution would be if the city does it, the only thing that kills it is the political opposition (inefficiency, corruptions, "communism", budget, etc.). The other possibility is a free-for-all, in which companies overbuild (house is serviced by multiple cables from multiple companies) in the densest areas, and the sparse areas get no service at all. When you consider the other options, government granted monopolies is the least bad option. Of course, you need to keep the monopoly in check, eg. regulating the price and/or forcing unbundling.

The fact that cities are doing the same thing with bike sharing belies the idea that they're thinking in economic terms (i.e. that they are actually designing and tailoring the policies based on the economics). In reality, they just want to get a bunch of concessions in a way where the cost residents are paying for those things is not readily apparent.

> The other possibility is a free-for-all, in which companies overbuild (house is serviced by multiple cables from multiple companies) in the densest areas, and the sparse areas get no service at all.

Which is fine. It takes very little competition to outperform a government built or regulated monopoly service in the U.S. Mobile devices are a dynamic market with really just two choices of operating systems, so is ride sharing, search engines, etc. If cities instead made it cheap and easy to hang wire on poles, most urban/suburban areas could probably have at least two choices.

If building service to sparse areas is a concern, the government could step in to do it. What we do now is force providers to build in economically unviable areas in order to get the right to build in economically viable areas. That destroys competition in the economically viable areas by dramatically raising the cost of entering the market. It would be better to just let competition happen where it can, and let the government step in where it needs to.

> If building service to sparse areas is a concern, the government could step in to do it.

This even happened in the past with wired phone service in some rural parts of Northern California. It worked just fine, with anecdotally better service and prices than the monopolies (AT&T or GTE).

Justifying the tax to provide a service with an existing private provider would be very difficult since the goal is building out service for the under serviced residences. If the city service tried to operate city wide, the private company would sue them claiming they can't compete. The company may sue even if the city is only trying to extend service to the underserved for the same reason.

Some of these success stories are more luck then repeatable solutions.

> Justifying the tax to provide a service with an existing private provider

I think you misunderstood. The tax would be on the private provider (serving profitable areas) and for the benefit of the public provider (serving unprofitable areas).

> If the city service tried to operate city wide, the private company would sue them claiming they can't compete.

The idea of taxation instead of monopoly power is not having the city operate anywhere a private operator would, in the first place.

The argument is that using monopoly power distorts the market to such an extent that it leads to gross inefficiencies and that more overall value can be extracted through competition and taxaction.

> The company may sue even if the city is only trying to extend service to the underserved for the same reason.

That part I don't follow.

Firstly, the notion that lawsuit against an entity that could legislatively preclude one is possible, is questionable at best. We are, after all, discussing, their existing use of monopoly power.

Secondly, even considering suit as a metaphor for seeking any kind of recourse (other than lobbying for not getting taxed at all), why would they want to?

> Some of these success stories are more luck then repeatable solutions.

I assume by "luck" you mean that the eventual circumstances were unforeseen by the original architects of the solution. I admit that I can conceive of a situation where that's at least theoretically possible (unexpected growth "in town" creating enough profitable customers to support an otherwise failing teclo), but I'd say the burden is on you to show that "some" isn't vanishingly few or even zero.

A scooter isn’t a human right, it’s a luxury. Requiring discounts for low income people is ridiculous. Perhaps San Jose should focus on solving real problems, such as the housing shortages that plague the region.

Owning a scooter may not be a basic right, but having access to transport is a necessity for most people. Scooters solve that requirement cheaply and efficiently.

Particularly for low income people, hiring a scooter is often a better solution than buying, maintaining and storing a full size vehicle.

Public transport is another option, but it doesn't effectively solve the transport problem for most people. Scooters are significantly more practical.

There's also the impact that new competitors will have on existing public transport.

As an extreme example, if every well-off bus user switched to using these scooters instead, the only bus passengers left would be the poorest. If the service offered discounted tickets for the poor it would be losing money for every customer.

I'm not claiming that the status quo should be propped up, but that these sorts of consequences need to be predicted and managed. It seems like this example has a ring of truth when talking about cars rather than scooters.

> As long as no one is getting hurt, why can't a company choose its target demographic?

They can, as long as they're not using public resources or imposing significant negative externalities. On the other hand, if you want to be part of the municipal transportation infrastructure, the stated goal of these scooter companies, cities may want a quid pro quo for that.

If that is the rationale (it isn’t), then the externalities should be priced in fairly for everyone, including those driving private cars. Otherwise you distort the market.

I would encourage you to propose that you your rep, of course, as I'm all for better pricing of externalities.

But there are a number of important differences between a person driving a private car for personal use and a company operating a business. An important one being that the business can possibly monetize the externalities, while individuals living their lives generally don't.

As an example, when I park my bike at a municipal rack, I don't make any money directly from that. I at most use one space, and on average use zero. But if I can make a profit from putting a rental bike at a municipal rack, I have an incentive to consume as many spaces as are profitable. On average I might use hundreds.

You bring up an important distinction. I'd like to coin a term: externality arbitrage.

Although an individual might be able to extract value, as you point out, the scale would be small.

A business, especially a VC-funded one, is much more likely to be able to scale this on a massive level, across many markets.

Why? Because governments like to achieve social outcomes by mandating cross-subsidies from profitable customers to non-profitable customers instead of explicitly funding the outcomes themselves.

However, like the proverbial hole in the bucket, this then requires additional pieces of legislation added over time to keep it working. In this case, to stop newer entrants from cherry picking the profitable customers.

The biggest advantage of direct explicit funding (which can be provided through competitive tendering) is that it allows competition to work better. The other advantage is that the cost of achieving the desired social outcome is explicit as a budget line item, rather than hidden as indirect costs, allowing for a more informed debate about what social outcomes the community wants.

> As long as no one is getting hurt,

You seem to have missed this line

> San Jose resident Doug Smith said he fell and hurt his shoulder after being hit by a scooter speeding outside Martin Luther King Jr. Library in March.

Wouldn't that be a bit like blaming Budget Rent a Car when one of their customers driving a rented car hits a pedestrian?

Multilingual customer support is a problem? According to California law, English is the official language. It seems onerous to require companies to support multiple languages. If they choose to do it for a competitive advantage, that should be their choice. This isn’t a government agency that has a vested interest in serving all citizens, this is a private company.

https://leginfo.legislature.ca.gov/faces/codes_displaySectio...

This is what it means to oppose inequality. If we cannot all have something, no one can.

Sounds like moving was a good choice for you?

What a world we live in, where a company can operate however it would like. Using up public roads and sidewalks, relying on 911 when things go awry, and pushing all the responsibilities to the community.

Things sure sound funny either way.

Absolutely. It's sort of like "Lemon Socialism": https://en.wikipedia.org/wiki/Lemon_socialism

Or exactly like modern capitalism!

This is OK as long as they pay their fair share of taxes.

Sorry, I’m reasonably libertarian but “operating in communities of concern” is fine by me for transit infrastructure providers. Taxis used to have laws that required them to go to any destination requested, and stop for any person hailing a ride. Now that Uber has largely replaced taxis, a vital piece of community infrastructure (point to point transportation) is only available to people with smartphones. I have no problem requiring that Uber take fares by phone, or that scooter companies service all areas, as transit infrastructure shifts from publicly owned to privately owned.

That problem was caused by taci regulation as well. Governments forbade ride hailing services to be hailed off the street.

>Taxis used to have laws that required them to go to any destination requested, and stop for any person hailing a ride

Laws that in my experience the taxi drivers completely ignored with no consequences. At least with Uber they pick you up before they find out the destination.

Lol. I still remember when I drove a taxi back in the day a street in Houston called Coke Street. Nobody would pick up there. And me, being an idiot, picked up a trip there and was promptly robbed at gunpoint. I’m laying on the ground with a gun in the back of my head while thugs took everything from me.

You can make laws, but self-preservation always trumps some misguided attempts by government to legislate “equal access.” When certain areas of town are higher risk than others, it’s immoral to require someone to service that area. I bet a member of city council never once visited that street at 3am, yet those same jackasses are those trying to require a private business owner/employee to put their life at risk in order to assuage their social justic guilt.

The people that can afford private taxis and Uber generally would have a smartphone. The ultra poor aren’t riding in taxis, but taking the bus. We shouldn’t be designing society around the idea that every single person deserves every single product or service available to the general public. Some people won’t get to ride in taxis; that’s just life. Some people can’t eat in restaurants— that doesn’t mean restaurants ought to be required to have a “low income menu.” Access to a taxi or a scooter isn’t a human right, it’s a luxury.