Lime, the San Francisco-based bike and scooter sharing service, announced in a letter to the Tempe City Council on Monday that it would be pulling its scooters out of the city.
It cited a high cost of doing business in the city and a liability burden as the two main reasons for removing the scooters.
A spokesperson from the city of Tempe said the city received the letter early Monday evening.
Lime stated in its letter that Tempe's liability requirement is "unprecedented among the over 100+ markets in which (the company) operates."
Tempe's liability requirements call the scooters "inherently hazardous," which the company said in its letter is reason enough for its departure from the city.
According to the letter, the city of Tempe charges $1.06 per scooter per day, which Lime claims is a higher fee than at least six other cities the scooters are currently in.
TaiAnna Yee, a transportation spokesperson for the city of Tempe, said she could not say whether or not the city's fees were notably higher than other markets, but said Tempe looked at other cities when setting its fee structure.
Bird, the first company to bring rental scooters to Tempe, pledged to pay one dollar per vehicle per day to the cities where it operates.
Yee wrote that the city uses revenue from the fee to educate its police department on enforcement and safety and to make sure sidewalks and streets are safe for riders.
The city decided to regulate rental bikes and scooters — which it calls "shared active transportation vehicles" — within months of Bird arriving in Tempe in May 2018. The council approved the Shared Active Transportation Vehicle licensing system on January 10 and gave scooter companies 30 days to apply for the license.
While Bird and Razor applied for the license by the deadline, Lime chose not to, Yee said.
"While we regret that Lime feels they are unable to operate in Tempe under the current license conditions, the city does believe the insurance, fees and other requirements are fair and necessary," the statement said.
Tempe Councilman Kolby Granville tweeted on Monday that he was "sad to see Lime leave."
"The goal of our regulation is not to drive the scooters out of the city, but to allow us to mitigate the secondary negative effects they cause," Granville said in the tweet. "In short, they have to pay some of the costs of the problems they are creating."
Editor's note: This story was last updated at 8:52 p.m. on Monday, Feb. 11. This is a developing story and will be further updated as more information becomes available.