Razor, one of the three dockless scooter vendors in Tempe, warned Tempe City Council that its time in the city could be coming to an end, according to a letter the company submitted to the city on Tuesday.
The letter states the new license agreement for shared active transportation vehicles — bikes, scooters and whatever new mode is on the horizon — adopted by the city on Jan. 10 "will prevent Razor from being able to serve Tempe beyond the next 30 to 60 days."
"The City's new licensing agreement, as it is currently written, seriously threatens our ability to continue operating in Tempe," the letter stated. The company cites the daily $1.06 per vehicle fee and "overly broad indemnification language" as the main threats to the company's vitality in the city.
The California-based company's letter to the city comes a day after Lime, another scooter and bike share company, announced its choice to withdraw from Tempe.
Unlike Lime, Razor submitted its license application on Tuesday and paid the annual right-of-way licensing fee on Wednesday, according to a Tempe spokesperson.
Bird, another California-based scooter company operating in Tempe, also applied for the license application.
The applications from Razor and Bird are pending approval, said TaiAnna Yee, a transportation spokesperson for the City of Tempe.
When dockless bikes arrived in Tempe in summer 2017, the city prepared a licensing agreement for the bike companies.
As scooter companies starting arriving, Yee said the city quickly realized the licensing agreement needed to encompass the new and future alternative transportation methods too. A working group was formed to determine the particulars of the agreement.
Discussion about the updated licensing agreement was first heard at city council in the spring 2018.
The final agreement consisted of an annual $7,888 right-of-way use license fee, a $100 per vehicle relocation fee and a daily $1.06 per vehicle right-of-way fee.
The agreement was approved by Tempe City Council at the general meeting on Jan. 10 and operators were given a 30-day grace period to submit their license applications.
Yee said because the city was in the process of drafting the license agreement, the new license fees will be the first of payments the companies are making to the city.
Taylor Strand, who works on Razor's government relations team, spoke at the city council meeting regarding the company's stance on the new license.
"Razor is proud to serve the riders of Tempe and plans to continue to do so, however, there are a few components in the regulatory framework that we would be grateful if council re-examines and potentially revises," Strand said at the meeting.
She said at the meeting that the daily $1.06 per vehicle right-of-way fee is "extremely high and difficult to track" and language in the license "forces operators to take on financial risk created by the city's own conduct."
Strand suggested the right-of-way fee be replaced with a 10-cent per ride fee and for council to work with operators to adjust the language in the agreement.
The concerns voiced in the city council meeting are echoed in the letter Razor submitted to city council on Tuesday.
"While we hoped to come to a mutually beneficial resolution to this policy debate, we have been wholly unsuccessful in our efforts thus far," the letter read.
According to the letter, Razor will continue to evaluate the company's viability in Tempe over the next month and hopes to identify a solution to operate sustainably without suspending the service.
Editor's note: This is a developing story and will be further updated as more information becomes available.