City Council
Report
City Council Meeting: July 23, 2024
Agenda Item: 5.A
1 of 4
To: Mayor and City Council
From: Anuj Gupta, Director of Transportation, Mobility (DOT) Subject: Approval to Reject All Bids for Contracted Shared Mobility Service Providers and Continue the Existing Permit-Based Program with Select Revisions Recommended Action
Staff recommends that Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines.
2. Reject all bids in RFP #344 Contracted Shared Mobility Services for the Department of Transportation.
Summary
Based on direction from Council, staff initiated an RFP for contracted Shared Mobility services in January 2023. After protracted negotiation efforts with shared mobility companies and considerable consolidation and disruption in the shared mobility market, staff determined no respondents could meet the City’s requirements. Therefore, staff recommend Council end the competitive process for contracted Shared Mobility services (bikes, scooters, etc.), and continue the existing permit-based Shared Mobility program with select revisions.
Discussion
The City Council initially directed staff to shift from a permit-based to a contract-based model of Shared Mobility administration at the March 9, 2021, Council meeting, with this shift to occur at the conclusion of a second phase of the ongoing Shared Mobility Pilot.
This direction was reaffirmed and solidified at the August 23, 2022, Council meeting, at which Council voted to adopt SMMC Chapter 3.23 “Shared Mobility Device Program,” 2 of 4
setting the legal framework for a contract-based system. At this same meeting, staff were directed to launch a competitive process selection process for up to two contracted Shared Mobility operators. Additionally, the second phase of the Shared Mobility Pilot was given an end date of September 30, 2023, with the to-be-selected Shared Mobility contracts to take effect on October 1, 2023.
The Council-directed competitive process officially launched in January 2023, when City staff issued a request for proposals (RFP) that embodied City goals for the program, centered on user affordability and equity, safety and order, and a wider array of userdemanded Shared Mobility device types. The selection process was designed to occur in two phases. In the first phase, staff received qualifying proposals from a total of six Shared Mobility operators by the submission closing date of March 8, 2023. The proposals were then evaluated and scored by a panel of six City staff and one external Shared Mobility expert.
Upon completion of scoring in May 2023, the second phase of the competitive process commenced. In this phase, staff negotiated specific contract terms with the two highestscoring operators, with the intention of taking negotiated terms back to Council for approval to execute the negotiated contract(s) with one or both operators. However, contract negotiations were delayed by several factors, including difficulty reaching Cityamenable terms, as well as an uptick in mergers, acquisitions, service disruption, and general instability in the Shared Mobility business ecosystem. Responding to these delays, staff returned to Council on September 26, 2023, where Council adopted a recommended emergency ordinance to extend the ongoing permit-based Shared Mobility Pilot past its previously slated end date of September 30, 2023, and to a date 30 days from the execution of one or more contracts under the Shared Mobility selection process, and the contract negotiations continued. However, the proposed contract terms did not promise to meet the goals initially set out by the City as it envisioned a shift to a contract-based service model.
During the course of phase two of the Contracted Shared Mobility Services competitive selection process, multiple emerging factors have led City staff to believe that it is no 3 of 4
longer in the City’s best interests to execute any contracts under the proscribed process. Staff initially held, and Council agreed, that, relative to the ongoing permitbased system, a contract-based Shared Mobility program would generate greater stability in the system and would allow the City to enforce more favorable level-ofservice terms. During the procurement, however, the hope for greater stability under contracts was turned on its head, with numerous organizational disruptions throughout the business ecosystem. Accordingly, City staff now believe that a more robust and durable Shared Mobility program can be achieved through the greater flexibility to add and replace operators that a permit-based system affords. At the same time, the anticipated level-of-service benefits from contracted service, most notably around user affordability and fare controls, promised to be less than what staff had hoped.
Based on these considerations, staff believe that the City’s best interests are served by rejecting all bids under the Contracted Shared Mobility Services RFP and continuing with permit-based operations. Council is empowered to do so by SMMC Section
2.24.220 “Formal procedures” in term (f)(5), which states that “[t]he City Council may reject any and all bids or proposals received” when the Council finds that “[t]he best interests of the City would be served by a rejection of any or all bids or proposals.” Environmental Review
Rejection of the bids in accordance with the formal procedures of the SMMC is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines which states that CEQA does not apply “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The rejection of the bids is administrative in nature. Therefore, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
Financial Impact and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action. Staff will return to Council if specific budget actions are required in the future.
4 of 4
Prepared By: Trevor Thomas, Senior Transportation Planner Approved Forwarded to Council
Attachments:
A. Written Comments