Title
Shared Micromobility Revenue Contract Solicitation - Request for Award - RCS 63-2213 (Ordinance S-49256)
Description
Request to authorize the City Manager, or his designee, to 1) enter into separate agreements with Neutron Holdings, Inc. d/b/a Lime, and Skinny Labs, Inc. d/b/a Spin, to provide shared micromobility services to include electric bikes, electric scooters, adaptive transportation options, and pedal bikes in Phoenix; and 2) authorize one additional Street Transportation Department position funded by permit and ridership revenues paid to the City through the agreements. Further request to authorize the City Treasurer to accept, and the City Controller to disburse, all funds related to this item. The gross revenues, based on ridership over the five-year aggregate term is estimated to result in $1 million in revenue to the City.
Additionally, request the City Council to grant an exception to Phoenix City Code section 3-8 to allow off-site (off-premise) advertising on the parking corral areas and on the micromobility units within the public right-of-way.
Report
Summary
Since September 2019, Phoenix has been operating a Downtown Shared Electric Scooter Pilot Program (E-Scooter Program), which has logged over 328,000 trips. City Council and downtown stakeholders have expressed a desire for a permanent program and the return of bike share. Based on this feedback, the Street Transportation Department (Streets) developed a Shared Micromobility Program which will diversify transportation options and promote active transportation while also generating additional revenue to the City.
Building on the success of the E-Scooter Program, award of these contracts will add traditional bicycles, electric bikes (e-bikes), adaptive vehicles, and increase the overall fleet cap. The new program will include requirements to address equity, safety, and parking concerns. The operational boundaries will be expanded beyond the current downtown E-Scooter Program boundaries. The initial phase will cover the area shown in Attachment A. With the expansion of the operating area of the shared micromobility program, the current boundaries for the E-Scooter Program will continue to utilize the established parking corrals. However, in the expanded operational areas, shared micromobility devices will be parked with lock-to requirements. Under the terms of the agreement, each contractor will provide and maintain parking corrals in the downtown core, as well as micromobility racks outside of the downtown core. In order for the program to remain cost neutral to the City, revenue will be used to cover the cost of staff time and resources used to manage the program. Additional revenue will go toward bike infrastructure and expansion of the program.
With a few exceptions, Phoenix City Code section 3-8 prohibits advertising in public right-of-way. The shared micromobility units that will be operated and maintained by Lime and Spin will be installed in the public right-of-way. As approved, the parking corrals in the public right-of-way would be granted an exception to Phoenix City Code section 3-8 to allow off-site (off-premise) advertising.
Procurement Information
Streets issued a Revenue Contract Solicitation (RCS) for shared micromobility services on Sept. 9, 2022. Four firms responded to RCS 63-2213 on Oct. 17, 2022; three of them are incumbents of the existing E-Scooter Program. Following a review of the proposals, in consideration of the RCS criteria, the evaluation panel deemed Lime and Spin to have the most responsive and responsible proposals.
The selection was made using a competitive procurement process in accordance with Phoenix City Code chapter 43 and Administrative Regulation 3.10.
The evaluation panel consisted of staff from the Public Transit, Street Transportation, and Community and Economic Development departments and a representative from Downtown Phoenix, Inc. Each proposal was evaluated and scored on the following criteria (1,000 total possible points):
- Method of Approach - 400 Points
- Equity - 200 Points
- Company's Experience, Operations Team, and Staffing - 175 Points
- Program Financing - 100 Points
- Marketing and Community Engagement - 75 Points
- Data - 50 Points
The evaluation committee recommendations were reached by consensus in consideration of the published selection criteria. The results are as follows:
Selected Firms
Skinny Labs, Inc. d/b/a Spin: Rank 1
Neutron Holdings, Inc. d/b/a Lime: Rank 2
Additional Proposers
Bird Rides, Inc.: Rank 3
GBike USA, Inc.: Rank 4
Contract Term
The initial term will be for three years, with an option for one two-year extension.
Financial Impact
This is a revenue-generating contract only with no capital outlay required by the City. The minimum annual permit fee is $15,000 per firm and a trip surcharge fee not to exceed 25 cents per trip, per Phoenix City Ordinance G-6835, subject to change should Council adopt a different fee structure. Based on ridership estimates, over $1 million of revenue is anticipated over the life of the contract with extensions included.
All expenses will be borne by the selected firms. Streets will utilize the annual revenues to cover the costs of the additional staff time for the City to manage, administer, and grow the program.
The one additional Streets position requested will be funded entirely by revenues paid to the City through the Shared Micromobility agreements. Any additional ridership or advertising revenues are anticipated to be used by Streets for downtown area street-related projects and expansion of the program.
Concurrence/Previous Council Action
The Transportation, Infrastructure and Planning Subcommittee:
- Was provided an update on the Comprehensive Micromobility Program on Oct. 20, 2021; and
- Recommended approval to issue a solicitation for the program on April 20, 2022, by a vote of 4-0.
The City Council:
- Approved staff to move forward with the procurement process for a Comprehensive Micromobility Program on May 11, 2022.
The Economic Development and Equity Subcommittee:
- Was provided an update on this item on Dec.13, 2022.
Public Outreach
Staff conducted extensive outreach in November 2021 to gather feedback from the community on the proposed program. Streets staff collected 209 responses through the online survey and recorded over 830 dot poll interactions from community members at four in-person outreach events. The public strongly supports a boundary expansion with the implementation of new parking requirements.
Location
Council Districts: 7 and 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Street Transportation Department.