Seattle adopts 250K annual fee for bikeshare companies that could pump the brakes on the new mobility service

Dockless shared bikes, LimeBike, Spin, and Ofo, in Seattle. (GeekWire Photo / John Cook)

Seattle approved a new $250,000 annual fee for dockless bikeshare companies that want to operate in the city Monday in a move that could have big implications for the nascent mobility service.

The fee will pay for designated bike parking zones and other costs. The Seattle Department of Transportation plans to allow four companies to run dockless bikeshare programs in the city.

There are currently three dockless bikesharing companies operating in Seattle as part of a pilot program: Spin, Lime, and Ofo. Monday afternoon, Ofo formally announced plans to leave the Seattle market.

“The exorbitant fees that accompany these new regulations — the highest in the country — make it impossible for Ofo to operate and effectively serve our riders, and as a result, we will not be seeking a permit to continue operating in Seattle,” said Lina Feng, Ofo’s Seattle general manager.

Councilmember Mike O’Brien championed the permanent bikeshare regulations. (GeekWire Photo / Monica Nickelsburg)

Ofo was already cutting most of its U.S. workforce and shutting down in many cities around the country before Seattle passed its fee. Ofo sent messages out to Seattle riders on Friday notifying them that the company was leaving. But on Sunday Ofo said those messages may have been sent in error.

Seattle concluded its bikeshare pilot this month. The city’s permanent dockless bikeshare program will increase the maximum number of bikes in Seattle to 20,000. There are currently about 10,000 shared bikes operated by Spin, Lime, and Ofo.

As soon as the Council adopted the fee Monday, Lime announced plans to pursue a permanent operator permit in Seattle.

“We’ll absolutely be applying for bikeshare permits when they become available next month, and plan to continue to serve this city and beyond with viable, accessible and affordable mobility options,” said Gabriel Scheer, Director for Strategic Development at Lime, in a statement.

Spin did not immediately respond to requests to comment. We’ll update this story when we hear back from them.

Uber, which acquired bikeshare startup JUMP in April, is eager to enter the Seattle market. The company has been giving demos of JUMP bikes in Seattle and has been eagerly waiting for Seattle’s final bikeshare regulations.

Seattle’s highest estimated costs will be creating designated parking areas for shared bikes. SDOT says it needs $400,000 to construct 150-200 bike parking zones on sidewalks and streets throughout the city. On Monday, the City Council passed an amendment that requires SDOT to come up with a bike parking enforcement plan.

Seattle has been experimenting with parking zones in certain networks, like Ballard. But even with the designated zones, riders often leave the free-floating bikes where it’s most convenient, not necessarily where SDOT wants them parked.

Lime bikes sit near an empty designated bike parking zone in Seattle’s Ballard neighborhood. (GeekWire Photo / Todd Bishop)

Seattle is one of the first cities in the country to embrace dockless bikesharing, which has gained popularity abroad. Other markets have kept a close eye on Seattle; the city’s new permanent bikeshare regulations could establish a model for others.

But when it comes to another hot new mobility service, Seattle lags behind other cities. Free-floating shared electric scooters have emerged across the country in cities like Washington, D.C. and Portland.

Scooters are not included in the regulations approved Monday. In fact, SDOT has notified scooter companies, like Bird and Lime, that if they try to launch in Seattle they will face fines and see their scooters confiscated.

That’s a hardline approach but a close look at the fee adopted Monday shows that SDOT wants to remain flexible.

The fiscal note associated with the legislation empowers SDOT to modify its annual fees if fewer than four bikeshare companies apply for the program or “to pilot additional mobility devices.”

That’s likely to encourage scooter share companies, which are chomping at the bit to enter the Seattle market.