Title
Downtown Shared Electric Scooter Pilot Program Fee Increases to Ensure Full Cost Recovery (Ordinance G-6835)
Description
Request to authorize the City Manager, or his designee, to approve fee increases associated with the Downtown Shared Electric Scooter Pilot Program to ensure full cost recovery.
Report
Summary
On June 26, 2019, City Council unanimously approved the Downtown Shared Electric Scooter Pilot Program, which allowed shared electric scooter vendors to obtain a permit to operate within the City of Phoenix. As part of the Pilot Program, City Council approved Ordinance G-6602, amending the Phoenix City Code to allow shared electric scooters to operate on public streets. The Ordinance amendment also included definitions for an electric scooter and authorized the City of Phoenix Police Department or peace officer to issue civil traffic citations for, among other things, speed limit violations, yielding the right-of-way, parking violations, and riding on the sidewalk. Additionally, the Ordinance amendment included a one-year sunset provision, which effectively would repeal the Code changes on June 25, 2020.
The initial six-month Pilot Program was to end on March 16, 2020. On Feb. 19, 2020, City Council approved Ordinance G-6676, extending the Pilot Program for an additional six months and to open the permit application process to allow new vendors to apply for the Pilot Program. Ordinance G-6676 also amended Ordinance G-6602 to extend the sunset provision until Dec. 31, 2020. Due to the COVID-19 pandemic, however, the start of the second six-month pilot program was delayed. To accommodate this delay, on Dec. 2, 2020, City Council approved Ordinance G-6772, extending the second six-month Pilot Program through March 31, 2021, and amending Ordinance G-6602 to extend the Phoenix City Code sunset provision to Dec. 31, 2021.
In October 2020, staff issued permits for the second six-month Pilot Program to two electric scooter vendors: Razor and Spin. The second six-month Pilot Program commenced on Oct. 1, 2020, and was scheduled to end on March 31, 2021. On March 17, 2021, City Council approved a 12-month extension of the Downtown Shared Electric Scooter Pilot Program through March 31, 2022, and an amendment to Ordinance G-6602 to extend the Phoenix City Code sunset provision to June 30, 2022.
Program Fees and Expenses
Vendors have been required to pay a $500 application fee and a $5,000 permit fee to participate in both six-month phases of the Pilot Program. In total, the City collected $27,500 in application and permit fees during the 12 months of the Pilot Program. In addition, vendors are invoiced monthly for a $0.10 surcharge fee per trip and for parking violations at the rate of $80 per scooter. During the first six-month phase of the Pilot Program, the City collected a total of $34,788 in surcharge fees and violations, and anticipates collecting an additional $16,000 during the second six-month phase. Therefore, the total revenue to the City during the initial 12-month Pilot Program will be approximately $78,288.
The City contracts with a scooter retrieval company, SWEEP, to monitor, report, and correct any vendor violations and is available 24 hours a day, seven days a week. The contract with SWEEP provides for a per day rate of $271, or approximately $8,100 per month. This rate is not based on the number of relocated scooters but on service availability. The total cost for the initial 12-month Pilot Program for SWEEP’s contract will be approximately $94,203. Streets staff currently provide approximately four hours of program management efforts per week. The total cost for program management for the initial 12-month Pilot Program will be approximately $48,000. Therefore, the total cost to administer the Pilot Program for the first 12 months is estimated at $142,203.
Because the administrative expenses have exceeded the revenues to the City to date, the Street Transportation Department has been working to ensure the Pilot Program is cost neutral to the City. In order to ensure the Pilot Program is cost neutral, the department has prepared to modify the Pilot Program fees by posting the proposed fee increases for public notice, pursuant to Arizona Revised Statutes Section 9-499.15, on Feb. 1, 2021. The proposed fee increases are a $500 application fee (unchanged); a six-month permit fee not to exceed $7,500 (increase of $2,500); a surcharge fee per trip not to exceed $0.25 (increase of $0.15); and a relocation parking fee not to exceed $100 per scooter (increase of $20). The Street Transportation Department is evaluating potential contract modifications for scooter retrieval services and working with the two current vendors to set the appropriate fees within these limits to ensure the Pilot Program is cost neutral.
Concurrence/Previous Council Action
The Aviation and Transportation Subcommittee:
- Recommended approval of the initial Pilot Program on Jan. 22, 2019, by a vote of 3-0; and
- Reviewed this item on June 25, 2019.
The Transportation, Infrastructure and Innovation Subcommittee:
- Was provided with a three-month update on the Pilot Program on Jan. 7, 2020;
- Recommended approval of the Pilot Program extension on Feb. 5, 2020, by a vote of 4-0;
- Was provided with an update on the Pilot Program extension on Feb. 3, 2021, and requested the item be brought back to the March 3, 2021, meeting; and
- Was provided with an update on the second six-month extension and recommended approval of a twelve-month extension on March 3, 2021, by a vote of 4-0.
The Planning and Economic Development Subcommittee:
- Was provided information on the initial Pilot Program on Feb. 5, 2019; and
- Received an update for information and discussion on June 4, 2019.
The Workforce and Economic Development Subcommittee:
- Was provided a report with a summary of the second six-month extension on Feb. 24, 2021 and presented on March 24, 2021.
The City Council approved:
- The Pilot Program (Ordinance G-6602) on June 26, 2019;
- A Pilot Program extension (Ordinance G-6676) on Feb. 19, 2020;
- A Sunset Provision extension (Ordinance G-6772) on Dec. 2, 2020; and
- A Pilot Program extension and a Sunset Provision extension (Ordinance G-6823) on March 17, 2021.
Public Outreach
The proposed fee increases were posted on phoenix.gov at least 60 days prior to this meeting in compliance with Arizona law. The schedule and written report or data supporting the increased fees is filed in the City Clerk Department. Also, as required by state law, a notice of intent to establish the proposed fee increases was posted on phoenix.gov at least 15 days prior to this meeting and was distributed through the City's social media accounts.
Location
The main boundaries of the Pilot Program are from 7th Avenue to 7th Street and from Buckeye to McDowell roads. The Pilot Program boundary includes an extension of the area bounded by Roosevelt Street and Grand Avenue, and a reduction of the northern boundary to Portland Street between 7th and Central avenues.
Council Districts: 4, 7 and 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Street Transportation Department.