Scooters are cheap enough and slow enough that the benefits to scale
- aren't hard to reach for anyone with funding, and
- can be maintained over relatively small geographic areas (neighbourhoods/cities, not states/countries/globally).
If some new company invents a scooter with better tires or a better battery or a disco ball and a stereo it's not hard for them to enter the market. And, in fact, this regulation is happening because the city thinks it's too easy for upstarts to get a toe-hold and cause negative externalities like sidewalk crowding.
(Besides these points: Has anyone made the argument that "overwhelming, unapproachable network-effect leads" are kinda great outcomes for consumers? Like, assume there were 10 facebooks instead of one -- kinda terrible. Or if there were a hundred Ubers and Lyfts, and you didn't know which one had cars close to you... awful.)