E-scooter companies ride on as councils lack authority to charge or regulate

7:48 am on 10 April 2019

Phil Pennington, Reporter

Councils are charging little or nothing to e-scooter companies poised to make millions of dollars in New Zealand.

Person riding a Lime scooter in Auckland city.

Photo: RNZ / Nick Monro

That's despite them facing significant costs, with Dunedin City Council estimating it's already spent hundreds of hours of staff time with zero recompenses.

Two of the six cities with e-scooters - Dunedin and Upper Hutt - are not charging the hire companies anything, and two others - Auckland and Lower Hutt - are charging very little.

The new transport technology caught Dunedin on the hop with an outdated bylaw, that means its trading permits cannot be applied to vehicles.

"Many people said 'well, you know, you charge for this food operator or a coffee van, how on earth can you not charge for this huge American company that's come to town with 700 scooters?'," the city council's community services general manager Simon Pickford said.

"People just didn't believe that we could do nothing."

Dunedin is now moving to change the rules so it can charge, though the bylaw could take most of the year to change.

Lime is also operating in Upper Hutt for free, though the council could charge it.

"Upper Hutt City Council doesn't have a prescribed fee for a Licence to Trade in a Public Place - the non-charging is not particular to Lime," the city council said in a statement.

Upper Hutt will review that at the end of an 11-month trial in November - a trial shared by Lower Hutt, where Lime has paid, in total, a one-off $150 administration fee to get a permit to trade in a public place.

An estimate by RNZ is that in the Hutt Valley, where 400-600 scooters operate, Lime could generate it $1.5 million in revenue a year based on each scooter doing four five-minute trips a day.

Hutt Valley Chamber of Commerce chief executive Helen Down backed the light-handed approach.

"It's very easy for councils to levy rates or fees on people, in fact, it happens in a whole range of things," Ms Down said.

"But when it comes to innovative businesses we need to make it attractive for businesses to come into our cities."

The scooters were a hit and being used "a huge amount," she said.

Wave scooters operate in Auckland. Photo: Supplied

In Dunedin, two local businesses had raised the fairness issue, Dougal McGowan of the Otago Chamber of Commerce said.

"It hasn't gone much further than that since the original couple of months," he said.

"And what we are aware of as well is this company is employing people, and those people are paying taxes ... what they also provide is a solution to that last kilometre of journey when you are using public transport."

Councils, over time, would get the balance right, he said.

The mobile vendor rental fee that Auckland has levied on the two e-scooter companies being trialled there, Lime and Wave, amounts to just $13 a year per scooter.

That compares to Christchurch's $86 per scooter, with the city council saying that's "consistent" with what other footpath traders pay.

Estimates are the 1000 scooters on trial in Christchurch could generate between $4m and $10m a year, doing between four and seven trips a day.

Wellington is the last of the cities to trial scooters - it's due to begin due on 18 June - but it is the first to fix a public education fee of $12.50 to each scooter, plus a $25 bond, plus $45 per scooter for monitoring and compliance for 18 months, which amounts to about the same fee as Christchurch.

Wellington councillors voted down a proposal to initially waive the fees. The council said: "Part of the trial is to identify the exact costs to the council."

Those costs could be extensive, Auckland Council has warned, though so far its external legal costs are $7000.

Christchurch points out there would be application, monitoring, maintenance and compliance costs, and probably new software to track multiple operators.

Simon Pickford from Dunedin council could only take a stab at the toll so far.

"It's been hundreds of hours of staff time," he said.

"I mean, they launched on 10 January and a big part of my time throughout January was dealing with scooter-related issues. It just sucked up a whole lot of time that we hadn't anticipated."

Councils are having to field complaints especially about e-scooter speed or being left lying on footpaths. They have been left by central government to largely regulate this themselves, increasing the load on councils.

RNZ asked the councils for any cost-benefit analyses around e-scooters but none was provided.

"Robust cost-benefit analysis is still quite difficult given the newness of e-scooter use in New Zealand, which means a lack of data is available, as well as increasing private ownership of e-scooters which is difficult to measure and constantly changing," Auckland Council said in a statement.

Wave said it was a New Zealand company, and its revenue stayed in this country.

Lime's director of Government Affairs and Strategy Mitchell Price said they were encouraging councils to recover their costs, as well as being able to fund awareness campaigns and infrastructure improvements.

Among the best models was Portland, Oregon in the US, where a percentage of the charge for each trip went to the city.

Lime had suggested to Auckland it do the same, with a 10-cent per fee on each of the 8000 or so trips a day, Mr Price said.

"I don't want ratepayers or taxpayers out of pocket for this service, but I also want to ensure the infrastructure is met and also we're investing in safety."

Recouping costs for e-scooters

Auckland

Upto 2000 scooters
Lime (US company) - $5970 in mobile trading licence fees from October 2018 to 31 March 2019; trial from October 2018 to October 2019
Wave (NZ company) - $3624 in fees (for three months of trial period)

Trial from mid-March 2019 to October 2019

Damaged or wrongly parked e-scooters must be removed within 12 hours of being reported, or cost $371 to get back from council

$6714 in external legal fees for council

Upper Hutt

No limit on scooter numbers - About 400 in Hutt Valley, according to Lime
Trip numbers running at 1600 a day from December 2018 through February 2019
Lime - no fee during trial, issued a Licence to Trade in a Public Place, 11-month trial from 14 December 2018 to 30 November 2019
Any fee decision up to councillors

Lower Hutt