Dockless Bike-Share Start-Up Spin Scuttles Rogue Launch Plan After DOT Sends Cease-and-Desist Letter

City Hall warned bike-share start-up Spin not to move forward with plans for an unauthorized launch in NYC next week, and the company backed down this afternoon.

So-called “dockless” bike-share companies could expand access to bike-share beyond the current Citi Bike service area, but DOT wants the arrangements to be on its terms. The agency is in the midst of discussions with Citi Bike operator Motivate and multiple dockless bike-share companies about expanding the bike-share on offer in the city.

“We want to experiment, we want to see new technologies,” said DOT Commissioner Polly Trottenberg. “But we do have a message, you have to work with us. You can’t just go out there on your own. We have an obligation to protect public safety.”

The San Francisco-based Spin had planned to drop 150 bikes in Manhattan and Brooklyn and another 150 in the Rockaways on Monday, Council Member Eric Ulrich told the New York Post. But in a letter today to CEO Derrick Ko, DOT attorney Michelle Craven threatened the company with police action if it goes ahead with the effort [PDF].

“Please be advised that you do not have the authorization or permission, pursuant to a concession, franchise, permit, contract or otherwise, required for such operations,” the letter says.

The agency also sent a less threatening letter with the same message to Citi Bike General Manager Jules Flynn, warning that the bike-share demonstration “pop-ups” it’s been planning outside the Citi Bike service area are in violation of the agreement Motivate signed with the city in 2014 [PDF].

DOT has been negotiating with Motivate for the last 18 months to determine the next phase of bike-share expansion in NYC. For the last six months, DOT has also been talking to a handful of bike-share start-ups, but not Spin, according to a City Hall source familiar with the process. Negotiations should wrap up in the coming months, the source said.

One concern regarding the new bike-share services is the quality of their bicycles, which appear less durable than Motivate’s, and the resources they are willing to spend on maintenance and distribution of the bikes. There’s also a risk that their services will cannibalize Citi Bike, which could leave the city with worse bike-share options if the new companies flame out in a few years.

DOT officials believe dockless bike-share technology offers an opportunity to improve and expand the current bike-share service on offer in the city, but are asking companies to hold off launching until the best course of action has been determined.

“We’re interested in what the newest generation of bike sharing technology can do to help us expand access to more neighborhoods and more boroughs,” said agency spokesperson Scott Gastel. “But this can’t be the Wild West, with ad hoc installations that haven’t received City approval and that don’t fully consider the future of bike sharing in New York. The public has an interest in a fully-integrated and expanding public bike sharing program that embraces the latest technology.”

In May, Politico’s Dana Rubinstein reported that a draft proposal for Citi Bike’s next round of expansion would give Motivate “some measure of exclusivity on city streets.” If Citi Bike is granted exclusivity within its service area, start-ups could still be licensed to operate elsewhere in the city.