Scooters Could Net Milwaukee $400,000 Per Year

Dockless scooters are here to stay in Milwaukee. And with them, a steady stream of revenue to fund transportation improvements.

A proposal pending before the Milwaukee Common Council would create a permanent regulatory framework, ending what had become an annual debate over creating a “pilot study” that allowed the for-profit companies to deploy their rentable, electric scooters temporarily.

The latest study, the third such effort since 2019, lasted from September 2022 through December 2023. During that period, the city recorded approximately 800,000 rides and received $400,000 in revenue.

The regulatory framework would establish approved vendors that could operate year-round.

The Department of Public Works (DPW) intends to charge the companies $100 per scooter annually, up from $50, and $0.25 per ride. With an estimated 2,000 scooters on city streets, DPW officials believe the city will receive at least $300,000 annually.

“That’s $200,000 upfront before any trips are even made,” said Public Works Commissioner Jerrel Kruschke on March 6 to the Public Works Committee. “This is anything from a minimum $300,000 to $400,000 revenue source long-term for the city.”

The city uses the money to monitor the scooter companies’ compliance with the city’s regulations, including deterring sidewalk riding and proper parking, and to build infrastructure for the benefit of pedestrians and bike and scooter riders.

The commissioner said the city has used some of the funding to add 123 on-street parking corrals, painted areas to store the scooters. “That’s where compliance has been much better,” he said. “It’s been very beneficial over this last pilot compared to the first two.” The commissioner said the corrals, located at the end of blocks, also make it easier for motorists to turn by improving sight lines.

Kruschke said ridership during the latest study period didn’t drop off as expected as temperatures dropped. He attributed that to many trips serving as a “last-mile” connection, where one might take a bus across town and finish with a short scooter ride.

“That’s the department’s angle here: to provide an alternative mode of transportation,” said Kruschke.

Multi-modal planning manager Michael Amsden said the city would work with the nonprofit Bublr Bikes and the Milwaukee County Transit System (MCTS) to create “mobility hubs” at key bus stops. He said the permanent regulatory framework, based on observations from other cities, would encourage the companies to collaborate with MCTS and Bublr.

Dropping A Company

When the scooters return, they won’t be as colorful. DPW will trim the number of approved operators, each of which has its own brand, colors, rates and smartphone application, from three to two.

Amsden said this would be a benefit to the city, riders and the general public.

“We have been constantly looking at what other cities have been doing, what works well elsewhere,” said the city’s multi-modal leader. He said it was easier to hold vendors to the terms of the agreement when there were fewer of them.

“Typically one or two companies tend to perform better than others,” said Amsden. “We have also heard, from the user experience [perspective], less is better than more.”

Keeping the number at two, said Amsden, avoids the risk that the city’s sole vendor declares bankruptcy and shutters.

He declined to publicly name the DPW’s perceived best performers, but administration and elected officials both previously said they have heard that Milwaukee is the most profitable market for Lime.

“We collect a lot of data,” said Amsden, noting that every trip and parking location is tracked. “We do evaluation studies each year to study how things are operating.”

Lime, one of a handful of venture capital-backed scooter startups, has participated in each of the Milwaukee pilots, as has competitor Spin. Veo replaced Bird in the latest pilot.

Amsden said total ridership has increased “tremendously over the years.” And citizen frustration, or at least the number of people willing to do something about it, has fallen. “The number of complaints has gone down over the years,” he said. The most common complaint remains improper parking, often blocking a sidewalk.

Alderman Russell W. Stamper, II said he’s noticed a surge in ridership in his central city district. Kruschke attributed that to the city’s zone maps which require scooters to be distributed across the city.

“From 2019 to 2022, 2023, we made significant changes in deployment requirements based on where they can be deployed throughout the city,” said Amsden. In 2019, 90% of trips were in Downtown and the East Side. That fell to 60% in the latest study. “We don’t want companies deploying scooters just Downtown.”

But even with the permanent framework, scooter companies will need to ensure that riders and those charging the vehicles are following the rules. Committee chair Ald. Robert Bauman said that the council would maintain the authority to terminate the program. Downtown riders were prohibited in 2021 after too many sidewalk trips were observed.

An Opening For a Local Operator?

Without naming the company, Bauman asked if the city could favor a local company.

“Say we want to literally favor a company who is headquartered here, whose principal place of business is the city, presumably that’s where the income they make is spent, deposited and reinvested,” said Bauman. “I would like to see if that’s possible.”

Only one such company exists – Johnny Vassallo‘s Blue Duck. The company launched in Texas in 2018, but later relocated to Milwaukee. It has never been approved to operate in Milwaukee.

DPW officials said they would check what the city could do.

Related Legislation: File 231648, File 231649