City Council
Report
City Council Meeting: July 23, 2024
Agenda Item: 10.B
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To: Mayor and City Council
From: Anuj Gupta, Director of Transportation, Mobility (DOT) Subject: Introduction for First Reading an Ordinance Repealing Santa Monica Municipal Code (SMMC) Chapter 3.23 and Amending SMMC Chapter 3.22 to Establish a Permanent Shared Mobility Device Program
Recommended Action
Staff recommends that Council:
1. Adopt a finding of categorical exemption pursuant to Section 15301 and Section 15308 of the California Environmental Quality Act (CEQA) Guidelines.
2. Introduce for first reading an ordinance to repeal Santa Monica Municipal Code (SMMC) Chapter 3.23 “Shared Mobility Device Program” and amend SMMC Chapter 3.22 “Second Shared Mobility Device Pilot Program” to update for an ongoing permit-based program.
Summary
City staff recommend that, contingent on the rejection of all bids in the ongoing competitive selection process for contracted Shared Mobility services being recommended concurrently with this item, the City Council repeal Santa Monica Municipal Code (SMMC) Chapter 3.23 “Shared Mobility Device Program” and amend SMMC Chapter 3.22 “Second Shared Mobility Device Pilot Program.” As presented in Staff Report 6395 (“Selection of Contracted Shared Mobility Service”), City staff no longer believe moving forward with the selection process for contracted Shared Mobility service is in the best interests of the City. At the same time, staff believe that Shared Mobility remains a valuable and broadly used mobility option for community members, and that it ought to be maintained and further improved under an iteration of the current permit-based structure. The recommended ordinance modifications provide for this program to continue on more solid footing.
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SMMC Chapter 3.23 (“Shared Mobility Device Program”) was initially adopted by Council on August 23, 2022, to transition Shared Mobility services in Santa Monica to a contract-based model, specifying that only shared mobility devices in systems “operated by a person or company contracting with the City for shared mobility device services” may be made available for rent in the City. Should Council accept staff’s recommendation to move away from contracted services and maintain a permit-based Shared Mobility program, this ordinance becomes moot, and staff recommend that Council repeal it.
SMMC 3.22 (“Second Shared Mobility Device Pilot Program”) was initially adopted by Council on February 11, 2020. It has been amended several times, most recently on September 26, 2023, and forms the legal basis for the ongoing second pilot program.
While staff believe that a version of the current permit-based program provides the best path forward for Shared Mobility in the City, the program would benefit from some amendments and revisions. Accordingly, several changes to SMMC 3.22 are being recommended to help facilitate this.
First, staff recommend that the title of the Chapter, along with wording within the Chapter, be changed to reflect that this is no longer a “pilot” program. Staff look to incorporate knowledge gained from six years of active program administration into a stable Shared Mobility program and recommend that the “pilot” language be removed from the ordinance.
Second, staff recommend that Council amend the process for operator selection outlined in SMMC 3.22.060. The current language is specific to the initial selection of operators to launch the second-phase pilot in July 2021. Staff recommend that these terms be modified to allow for the continued operation of the two long-running operators currently providing service in the City, while providing for the flexible inclusion of additional operator(s) in a manner that is streamlined but still imposes robust safeguards against overcrowding and disruptive service. 3 of 10
Finally, staff recommend that SMMC 3.22 be modified to remove a permit-program end date that is currently pegged to the execution of one or more contracts under the Contracted Shared Mobility Services selection process. Contingent on Council rejecting all bids under that process, this term becomes moot. In its stead, staff recommend that Council adopt language establishing periodic review of program and operator performance under an ongoing and mature permit-based program.
Background
Shared mobility services have been an important part of Santa Monica’s transportation system since the 2015 launch of the City-owned Breeze Bike Share system and subsequent rollout of electric shared mobility devices in 2017. These devices aligned with City goals to reduce transportation emissions, mitigate congestion, and improve community members’ access to destinations. Shared mobility services are an especially good fit for Santa Monica because they provide flexibility, are usable year-round, provide first-/last-mile connections to the public transit network, and feel safe and reliable for many people to use on the City’s 100+ mile bike network, much of which has been installed in the last decade since City Council adopted the Bike Action Plan.
On June 26, 2018 (Attachment A), Council approved the creation of a Shared Mobility Pilot Program to develop a new area of policy, regulation, operation, and enforcement for shared mobility devices in Santa Monica. System performance improved during the first pilot program, which officially launched in September 2018. However, challenges remained in managing the public right-of-way (PROW), encouraging public safety, adapting old regulations to new business types, and ensuring companies were accountable for public outcomes.
On March 9, 2021 (Attachment D), staff returned to Council to provide an update on the Shared Mobility Pilot and to recommend shifting from a permitted pilot program to a longer-term contract model that would strengthen the City’s partnership with operators.
Council directed staff to implement a second Shared Mobility Pilot Program to allow 4 of 10
time for COVID-19 related uncertainty to settle and shift to a contracted model on March 30, 2023. In August 2022, Council subsequently directed staff to procure contracted service with a pushed-back start date of October 1, 2023 (Attachment E).
The competitive selection process for contracted service launched in January 2023, with the City issuing an RFP that highlighted City goals. A total of six shared mobility operators submitted proposals by the March 2023 deadline, from which a selection committee of cross-departmental City staff and one outside expert identified two highest-scoring bids in the first phase of the selection process. In the second phase, City staff communicated with those two highest-scoring proposers to develop contract term sheets to take back to Council for approval and execution. With this process still underway in September 2023, Council again pushed back the end date for existing shared mobility permits, extending the date to 30 days after one or more contracts for shared mobility service are executed (Attachment F).
Background Timeline
Date Description Attachment
November 2015 City-owned Breeze Bike Share system debuts. N/A September 2017 Bird Rides, Inc. e-scooter sharing launched in Santa Monica.
N/A
June 26, 2018 The City formally approved a Shared Mobility Device Pilot Program and associated fees to
develop a new area of policy, regulation,
operation, and enforcement for shared mobility
devices in the City.
A
February 11, 2020 The City extended the term of the first pilot program, and the City subsequently released in
March 2020 a Request for Applications (RFA) for
the second pilot program.
B
May 12, 2020 Due to the COVID-19 pandemic, the second pilot program was postponed, and the first pilot
program was extended until April 30, 2021. The
Shared Mobility PROW fee was revised from $1
per device per day to $0.20 per trip.
C
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March 9, 2021 Council directed staff to implement a 21-month second Shared Mobility Device Pilot Program.
Then, following the second pilot program, shift
from a temporary permit model to a longer-term
contracting model for shared mobility services in
the City.
D
July 1, 2021 The City launched the second pilot program. N/A August 23, 2022 Council adopts SMMC 3.23 to structure a contract-based next phase of shared mobility,
directs staff to procure contracted shared mobility
service.
E
January 2023 Competitive selection process for contracted shared mobility launches.
N/A
September 26,
2023
Council amends SMMC 3.22 to extend existing
shared mobility permits until 30 days after
execution of one or more contracts for shared
mobility service.
F
Discussion
After careful consideration of potential paths forward, staff recommend a pivot away from contracted shared mobility service to a refreshed and mature permit-based program. This recommendation has three main parts. In addition to rejecting all bids under the ongoing contracted shared mobility competitive selection process (outlined in Staff Report 6395 “Selection of Contracted Shared Mobility Service”), staff recommend that Council repeal SMMC Chapter 3.23 (“Shared Mobility Device Program”), which provides a legal framework for contracted shared mobility service in the City, and amend SMMC Chapter 3.22 (“Second Shared Mobility Device Pilot Program”) to update it to accommodate an ongoing and mature permit-based shared mobility program.
Benefits of Ongoing Permit-Based Service
While the ongoing shared mobility pilot is down to two of its initial four operators, and 1,400 of its initial 2,200 permitted devices, ridership in the system – and the mobility benefits that ridership reflects – continues to outpace available alternatives. In the first quarter of calendar year 2024, the City’s shared mobility program saw a total of 125,736 trips. By comparison, in this same timeframe LA Metro Bikeshare’s docked system saw a total of just 8,030 trips beginning and/or ending within Santa Monica, and 119,859 6 of 10
trips across the entirety of its service regionwide. While Metro Bikeshare’s ridership has increased sharply in past years, it still offers a very small percentage of the realized benefit of the City’s dockless shared mobility within Santa Monica. Additionally, as revealed through multiple City-designed user surveys, many of these trips within the City’s dockless program – on the order of 33% to 40% – are taken in lieu of an automobile trip, thereby reducing pollution and congestion. Likewise, many of these trips are serving valuable transportation ends, connecting people to jobs, restaurants, and other local destinations.
Moving Away from Contract-Based Operations
Beyond the importance of current permit-based shared mobility service, there are several motivations for the recommendation to pivot away from contract procurement and back toward a mature permit-based system. The initial rationale for shifting toward a contract-based model for shared mobility was centered on the operational stability and efficiency of longer-term commitments from contracted operators, the ability to impose greater affordability constraints on operator fares, and the ability to revamp device types and service offerings from operators in a new set of operational agreements. In working through the selection process for contracted service, though, City staff found that the anticipated benefits of a contract-based system were unlikely to fully materialize, particularly with respect to fare affordability. The baseline fares targeted in the City’s Request for Proposals (RFP) for contracted service were not fully met, with preliminary terms from the high-scoring bidder representing only marginal improvements on the affordability status quo.
At the same time that the benefits from contracted service have projected to fall short of initial expectations, the risks from entering into exclusive, long-term commitments with a small number of operators have increased. In the period since Council first directed City staff to select contracted shared mobility service in August 2022, numerous operators have prematurely halted operations within the City, diminished service across other operating regions, declared bankruptcy, and/or halted operations altogether. This increased industry-wide instability implies substantial and increased risk to the City in contracting with one or two operators for the planned duration of three to six years. In 7 of 10
the event that the City contracted with an operator that then ceased or curtailed operations, the City could be left with a major gap in shared mobility service, with no quick and certain way to address it.
Recommended Improvements to Shared Mobility Program
While the City’s shared mobility program continues to provide value to the community, it can be improved and stabilized in several respects. The recommended ordinance changes aim to do so in several ways:
• Repealing SMMC Chapter 3.23 (“Shared Mobility Device Program”) to formally shift away from a contract-based approach;
• Amending wording in SMMC Chapter 3.22 (“Second Shared Mobility Device Pilot Program”) to enshrine shared mobility’s evolution beyond its pilot stage; • Amending SMMC Chapter 3.22 to retain current, successful operators and facilitate prudent and beneficial operator additions; and • Amending SMMC Chapter 3.22 to clarify and updated the program’s timeframe.
As listed above, the City’s shared mobility system can be improved via several recommended amendments to SMMC Chapter 3.22. First, City staff recommend that Council adopt changes to the title and wording of the chapter, shifting the framing of the program from a second “pilot” phase to a mature and ongoing permit-based program.
Pilots play a valuable role of learning and refinement in transportation systems, and the City has learned a great deal over the course of two extended shared mobility pilot programs, better understanding the benefits and drawbacks of dockless shared mobility, and policy levers to maximize the former and minimize the latter. The City is now in a place to apply this improved understanding and enshrine mature program of oversight and regulation.
Beyond the shift in tone, City staff also recommend that SMMC 3.22 be amended to update the process to carry over existing operators into a new program phase, while 8 of 10
allowing for the flexible but prudent addition of additional operator(s). As outlined above, the landscape of shared mobility operators has been shifting and at times tenuous. By adopting a procedure to add responsible, responsive, and well-established operator(s) to the City’s system, the City can work to ensure the continuation of mobility benefits that the community of users receives. At the same time, the procedure will retain safeguards against overcrowding of operators and devices, as well as against marginal and poorly managed operations.
Finally, City staff recommend that SMMC 3.22 be amended to formally update the timeframe of the program. When the City launched its effort to procure contracted service, SMMC 3.22 was amended to terminate shared mobility permits 30 days after one or more shared mobility service contracts were executed. Given a decision to no longer pursue such contracts, this term becomes outdated; staff recommend that it be amended to reflect an ongoing program with periodic review.
Beyond the recommended changes to SMMC, City staff would also take advantage of a refresh to the permit-based shared mobility system to update and refine the City’s Shared Mobility Administrative Regulations. These regulations present a set of operational requirements for operators, including number and type of permissible devices, fees paid by operators to the City, maintenance and order-keeping requirements, insurance and indemnification requirements, and enforcement structures.
Given a continued and renewed permit-based program, City staff will administratively update these regulations to call for and enable a greater diversity of communitydemanded device types – most notably class 1 e-bikes, which have been absent from the City’s program since Lyft halted service in November 2022. Additionally, staff will enhance terms to incentivize improved order for user-parked devices and will adjust fees as needed to ensure continued cost recovery for the City’s administration and planning around the program.
By adopting these measures, staff believe that the City’s shared mobility system can continue to provide substantial value to those seeking to travel within the City. Through thoughtful adjustments to the SMMC and associated Shared Mobility Administrative 9 of 10
Regulations, as well as an evolving partnership with operators, the City can continue to work toward the goals that motivated the previous move toward a contract-based system. Specifically, the City will continue to work with operators to find avenues for system affordability, bolstering existing requirements for affordable fare and frequent user programs, and working to facilitate partnerships between operators and local employers. Likewise, the City will promote and enable a broader range of useful devices through updates to fleet caps and fleet cap adjustment procedures in the Shared Mobility Administrative Regulations, as well by inserting terms for more effective parking incentives and requirements. Finally, the City will continue to ensure that the program achieves full cost recovery through the continuation of targeted fees levied on operators.
Environmental Review
The revisions to the SMMC for shared mobility 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 proposed ordinance to change regulation of shared mobility devices from a permit system to a contracted service model 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.
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Prepared By: Trevor Thomas, Senior Transportation Planner Approved Forwarded to Council
Attachments:
A. Shared Mobility Services Ordinance Amendment 7-23-2024 B. Attachment A. June 12, 2018 Staff Report
C. Attachment B. February 11, 2020 Staff Report
D. Attachment C. May 12, 2020 Draft Ordinance
E. Attachment D. March 9, 2021 Staff Report
F. Attachment E. August 23, 2022 Staff Report
G. Attachment F. September 26, 2023 Staff Report
H. Written Comments
I. PowerPoint Presentation