The electric scooter acid test

Suddenly, electric scooters seem to be everywhere. The two-wheeled, long-handled, battery-powered contraptions are creating a multibillion-dollar industry for companies such as Bird and Lime that are developing sharing networks for riders -- and headaches for government officials tasked with regulating them.

According to transportation experts, scooters make the most sense in urbanized areas for the so-called last mile: areas that are too far to walk to and too small for public transportation to access. Bird and Lime (previously known as LimeBike), which are each valued by their backers at more than $1 billion, came along just as the technology for scooters improved, with batteries getting smaller and cheaper. Google parent Alphabet and Uber have invested $335 million in Lime. Bird's backers include Sequoia Capital, Valor Equity Partners and Index Ventures.

The dockless scooters these rental companies offer have an electric-assist throttle that let riders hit speeds of 10 to 15 miles per hour. Rides cost $1 per half-hour, followed by additional fees based on the distance traveled. The scooters can be accessed via a smartphone app.

"The biggest barrier to the adoption of the technology is what I would call the dorkiness quotient," said Abhishek Nagaraj, an assistant professor at the Haas School of Business at the University of California Berkeley. "It's not the most exciting-looking thing for people."

However, once people get used to scooters, they like them.

"I think they contribute to the sense of freedom that young people love," said Randy Machemehl, a professor of mechanical engineering at the University of Texas.

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Scooter- and bike-share transport options have led to congestion on sidewalks. 

CBS News

But the battles over electric scooters are just cranking up.

Baltimore is a case in point. As the Baltimore Sun reported, Bird deployed 60 dockless scooters in Maryland's largest city a few weeks ago without first getting clearance from local officials. As a result, the paper noted that Bird's scooters are often "scattered across sidewalks" and "propped up against buildings."

Until the city crafts regulations, officials are warning riders that they're operating scooters at "their own risk," according to the Sun.

Bird also is under fire in Milwaukee, where its scooters appeared on city streets earlier this month. Police there issued the first citation for a Bird rider for violating a state law regarding the operation of an unregistered vehicle after he accidentally struck a pedestrian, as reported by the Milwaukee Journal-Sentinel.

At a July 31 meeting, the Milwaukee Common Council is expected to consider a proposal to ban the vehicles until the state law is changed. Earlier this month, Milwaukee sued Bird, accusing the Santa Monica, California, company of ignoring its request to cease operations in the city. A spokeswoman for Milwaukee Mayor Tom Barrett said, "the mayor believes there is a workable solution." 

In a statement to CBS MoneyWatch, Bird declined to address any specific situation, though it argued that it was looking to form partnerships with cities interested in reducing traffic and air pollution from motor vehicles.

"We are proud to work with city and community leaders to strengthen access to affordable, convenient, and environmentally friendly transportation options to help people get around," said Bird spokesperson Kenneth Baer in the statement. With these partnerships, we look forward to continuing to support strong and sustainable communities across the country."

Bird has begun responding to complaints from some city officials, temporarily pulling the plug on operations in St. Louis and Nashville to allow officials time to develop regulations for the nascent industry.  Lime has also gotten its fair share of criticism, mainly the same complaints leveled against Bird in cities such as San Francisco, which sent cease-and-desist letters to Lime, Bird and a third operator called Spin, claiming their scooters were a nuisance.

A Lime spokesman said the company introduced its service in San Francisco at community events held on St. Patrick's Day so it could gather data to help it develop its operations later on when the city's formal permit program was in effect.

"Unfortunately, our competitors used our limited rollout as a pretext to blanket the city with scooters, creating the chaotic situation that ultimately ensued," wrote Lime spokesman Joe Arellano in an email.

Scooter operators were ordered to pull their vehicles from San Francisco's streets until a pilot program backed by the city starts in August. 

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.