Washington, DC (CNN Business) - Bird's electric scooters are returning to San Francisco this week, nine months after the city unceremoniously kicked them out.
The Santa Monica, California-based startup that pioneered electric scooter-sharing is launching a monthly rental program in San Francisco despite not having formal government approval.
For $24.99, a person can have an e-scooter delivered to them, and ride it for a month. For regular riders, it's a more affordable option than renting one of the city's shared e-scooters or taking most others modes of transportation. Bird is the first scooter company to launch such a program.
But Skip, one of Bird's competitors that was granted a permit to operate shared e-scooters in San Francisco, is crying foul. The city hasn't determined if the new program is legal.
"While we support all efforts to get more people out of cars and into the bike lane, subscription models designed to use loopholes in the system undermine the long term objectives of a sustainable micromobility system," Skip CEO Sanjay Dastoor said in a statement.
E-scooter companies such as Bird spread quickly nationwide in 2018, following the blitzscaling playbook of growing fast to grab marketshare. But the scooters have been criticized for being haphazardly parked and creating safety issues on sidewalks. Some cities have responded by designating on-street parking areas for scooters and capping their speeds in popular pedestrian areas.
Bird launched last spring in San Francisco without government approval, spurring complaints from residents. The government impounded improperly parked Bird scooters and issued violations before Bird removed its scooters a few months later as the city launched a sanctioned e-scooter program.
Bird applied along with 11 competitors, but its application received a poor rating on 10 of the 12 criteria the city evaluated it on such as safety and community outreach, tying it for last place with Razor. San Francisco criticized Bird's strategies for helmet use, equitable access and responsible parking. The city also disapproved of how Bird used gig economy workers who were trained by watching videos on how to charge and maintain scooters.
But those low marks may not hold it back from returning to the city.
Bird's monthly rental program circumvents the caps placed by San Francisco and other cities by not offering a scooter that's shared among multiple people. The new business model may allow Bird to grow faster if cities embrace it.
Scoot, a Bird rival that's authorized to offer shared scooters in San Francisco, said it has no objection to Bird's new program. Scoot expects there will be fewer problems with Bird's scooters this time around.
"When someone is renting a scooter by the month, it's practically like they own it. They're going to take care of it," CEO Michael Keating told CNN Business. "We need more human-scale mobility in San Francisco and every other city. If Bird can't get the shared permit and wants to make it easier for someone to rent by month, more power to them."
Bird told CNN Business it has a San Francisco business permit, and riders will be required to lock their scooter to a fixed object, like a bike rack, when parking outside. If a rental is damaged or needs repair, Bird will swap it out at no cost. Riders are responsible if damage is cosmetic, the result of vandalism or vehicle abuse, or results in total vehicle loss.
At $25 a month, Bird is likely to lose significant money on the unit economics.
"The price seems really, really low," Keating said.
The scooters Bird will use retail for roughly $500, so it could take more than a year and a half for the scooter to pay itself back. Bird has previously said its scooters used in a shared model lasted about three months. The scooters may endure less wear and tear from personal rentals, however.
The company, which hasn't said how many scooters will be in the program, sees monthly rentals as a way to provide an equitable and consistent daily commuting option for all.
"Renting a Bird for an entire month of unlimited use will cost less than just a couple of ride hail trips or parking garage days in most cities," Bird CEO Travis VanderZanden said in a statement when Bird announced the program two weeks ago.
Bird is also launching monthly rentals in Barcelona soon and may expand elsewhere. And competitors may follow.
The Micromobility Coalition, an industry trade group that counts Lime and Uber as members, said it believes cities should adopt policies that welcome monthly rentals to help get people out of cars, ease congestion and reduce emissions.