SR 06-29-2021 1A
City Council Report
City Council Meeting: June 29, 2021
Agenda Item: 1.A
1 of 1
To: Mayor and City Council
From: George Cardona, Interim City Attorney, City Attorney's Office
Subject: Conference with Legal Counsel – Anticipated Litigation – Anticipate significant
exposure to litigation pursuant to Government Code Section 54956.9(d)(2):
Threat of litigation related to selection of shared mobility providers to
participate in the Second Shared Mobility Pilot Program established by
SMMC Chapter 3.22
Prepared By: Esterlina Lugo, Deputy City Clerk
Approved
Forwarded to Council
Attachments:
A. 2021.05.25.Letter.OMMtoDOT
B. Written Comments
1.A
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Century City • Los Angeles • Newport Beach • New York • San Francisco • Silicon Valley • Washington, DC
Beijing • Brussels • Hong Kong • London • Seoul • Shanghai • Singapore • Tokyo
Daniel R. Suvor
D: +1 213 430 7669
dsuvor@omm.com
T: +1 213 430 6000
F: +1 213 430 6407
omm.com
O’Melveny & Myers LLP
400 South Hope Street
18ހ Floor
Los Angeles, CA 90071-2899
May 25, 2021
VIA E-MAIL AND U.S. MAIL
Edward F. King
Director of Transit Services
City of Santa Monica
1685 Main Street
Santa Monica, CA 90401
Re: Shared Mobility Pilot Program (Project ID 31721) – Administrative Appeal of Bird
Rides Inc.
Dear Director King:
Pursuant to Section 3.22.060(h) of the Santa Monica Municipal Code (“SMMC”), Bird Rides Inc.
(“Bird”) submits this appeal of the Mobility Officer’s Final Administrative Decision, issued May
12, 2021, for the Shared Mobility Device Pilot Program.
BASES FOR APPEAL
The Mobility Officer’s selection of applicants to participate in the second Shared Mobility Device
Pilot Program followed from multiple violations of California law and the SMMC that rendered
the applicant selection process unfair and unlawful. Bird brings this appeal on the following
grounds:
1. The Mobility Officer issued her final determination at the same time that she disclosed
the recommendations of the shared mobility operator selection committee. In doing so,
she denied Bird an opportunity to comment on the committee’s recommendations, in
violation of the SMMC.
2. The selection process for the Shared Mobility Device Pilot Program did not provide Bird
with fair notice of clear and objective criteria to be used for the selection of applicants.
Many outcome-determinative criteria were disclosed for the first time in the Mobility
Officer’s final determination. The Mobility Officer abused her discretion by creating new
criteria, not disclosed in the RFA, only after all applications were received. Because the
City failed to disclose the criteria on which it would base its determination, it undermined
the integrity of the application process and violated basic principles of fairness enshrined
in California law.
3. There is no indication that the selection process for selecting applicants to the Shared
Mobility Device Pilot Program followed from a fair or objective evaluation of the
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proposals. To the contrary, the rankings appear to follow from significant
misunderstandings or falsehoods. Without any explanation for why applicants received
the scores they did, and with Bird’s application being far stronger than the winning
applicants on several key categories in which they scored higher than Bird, the resulting
rankings appear to follow from no objective criteria at all. Given the substantial flaws in
the scoring process, the Director should reevaluate and rescore the bids, and Bird
should be awarded one of the final licenses.
Relief requested: In light of the serious defects and violations of the SMMC evident in the
selection process, the Director should reevaluate the Mobility Officer’s determinations pursuant
to SMMC § 3.22.060(i), which states “the Director shall either confirm the Mobility Officer’s
determinations or render his or her own determinations of applicant ranking and of the
applicants to whom mobility device operator permits will be issued.” Bird requests the Director
reweigh the selection criteria and rescore each application, and select Bird as one of the
licensed operators of two-wheeled scooters in the Shared Mobility Device Pilot Program.
Alternatively, the Director may select Bird as the fourth e-scooter operator, without rescoring the
applicants, based on the strength of its application. See SMMC § 3.22.040 (as amended by Ord.
2666) (allowing four shared mobility operators to be issued permits).
DISCUSSION
Background
Bird was founded in Santa Monica in 2017, earning instant support and positive feedback from
the community. Bird’s global headquarters is located here, where it employs nearly 100 Santa
Monica residents. For years, Bird has enjoyed a friendly and collaborative relationship with the
City of Santa Monica (hereinafter, the “City”), and was a key participant as the City founded its
first Shared Mobility Device Pilot Program.
Building on the success of this pilot program, the City passed an ordinance to establish a
second pilot program, codified at SMMC § 3.22.010 et seq. Under that ordinance, the City was
required to follow a specific selection process for selecting a limited number of operators under
the pilot program, using a shared mobility operator selection committee (hereinafter, the
“Selection Committee”) to rank applications based on objective criteria. See SMMC §§
3.22.060(a)–(c). The process set forth in the ordinance contemplates an opportunity for
applicants to comment on the Selection Committee’s recommendations. Id. § 3.22.060(d). Then,
after that comment period, the City’s Mobility Officer would review the Selection Committee’s
recommendations and make a final determination. Id. § 3.22.060(e).
On March 17, 2021, the City released a Request for Applications (“RFA”) for the second Shared
Mobility Pilot Program (hereinafter, the “Program”). Bird timely submitted an application that was
responsive to the RFA and provided all the information the City requested. On April 22, 2021,
Bird participated in a device demonstration to show city officials how its scooters function.
The City altered the timeline for application submissions and final determinations several times,
then posted the Mobility Officer’s selection decision on May 11, 2021. That decision revealed for
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the first time the recommendations of the Selection Committee. The Mobility Officer based her
determinations on the Selection Committee’s recommendations and based on new criteria
revealed for the first time in the final selection decision.
Bird timely submits this appeal pursuant to SMMC § 3.22.060(h).
The City Denied Bird the Opportunity to Comment on the Selection Committee’s
Recommendations as Required by the SMMC
SMMC § 3.22.060 sets forth the selection process for applicants to the Shared Mobility Device
Pilot Program. That Section describes a particular sequence of events: First, the Mobility Officer
establishes the Selection Committee. SMMC § 3.22.060(a). Second, the Selection Committee
reviews all applications according to objective criteria. Id. §§ 3.22.060(b)–(c). Third, “each
applicant shall be provided an opportunity to submit written comments or objections to the
committee’s recommendations.” Id. § 3.22.060(d). Fourth, and only after that required comment
period, the Mobility Officer makes her determinations after requesting additional information, if
any, from City staff or the applicants. Id. § 3.22.060(e).
The Mobility Officer did not adhere to this process as required by the SMMC. Rather, she
disclosed the Selection Committee’s recommendations at the same time that she issued her
final determinations. In doing so, she deprived Bird the opportunity to provide further information
that likely would have influenced her final selections. For example, on issues of insurance and
financial stability, Bird would have provided information showing that it could provide levels of
insurance that no other operator could, and that it is the best capitalized, private (in the process
to become public) and independent shared mobility provider with audited financials. In addition,
Bird’s durability score appears to reflect an evaluation only of its previous-generation model of
scooter, even though its bid includes newer, state-of-the-art scooters with unmatched durability.
Moreover, many applicants touted a “swappable battery” model that purportedly is more
environmentally sustainable than other recharging operations. Had the Mobility Officer afforded
Bird an opportunity to comment on the Selection Committee’s recommendations, Bird could
have provided information that shows these environmental benefits are illusory and that
swappable batteries can actually increase vehicle miles traveled and increase greenhouse gas
emissions by requiring an estimated 1.5 to 2 batteries per vehicle. The increased battery
requirements for swappable vehicles leads to higher overall manufacturing emissions and
increased e-battery waste.
Admittedly, Section 3.22.060(d) does not expressly provide that the applicants must be provided
an opportunity to comment on the Selection Committee’s recommendations prior to the Mobility
Officer’s final determination. But that is the only logical way to read this Section. Otherwise, the
opportunity to comment is meaningless because it could have no effect on the Mobility Officer’s
decision. It would also conflict with and duplicate the opportunity for appeal that follows the
Mobility Officer’s determination. See SMMC § 3.22.060(d)–(h); see also Halbert's Lumber, Inc.
v. Lucky Stores, Inc., 6 Cal. App. 4th 1233, 1239 (1992) (If the language of the statute is unclear
on its face, the next step in statutory interpretation is “to apply reason, practicality, and common
sense to the language at hand. If possible, the words should be interpreted to make them
workable and reasonable.”). Moreover, Section 3.22.060 is structured chronologically and
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therefore should be read that way. See People v. Lewis, 43 Cal. App. 5th 1139–40 (2020)
(“When the statutory framework is, overall, chronological, courts will construe the timing of
particular acts in relation to other acts according to their location within the statute; that is,
actions described in the statute occur in the order they appear in the text.”); KB Home Greater
Los Angeles, Inc. v. Superior Court, 223 Cal.App.4th 1471, 1477 (2014) (sequential structure of
statutory scheme supports interpretation that acts required by the statutes occur in the same
sequence).
Because the Mobility Officer rendered a final decision without allowing Bird to comment on the
Selection Committee’s recommendations, as required by Section 3.22.060(d), the Mobility
Officer’s determination should be reevaluated, and Bird should be selected as one of the final
licensees.
The Mobility Officer’s Final Determinations Were Based on Criteria Not Disclosed
in the Request for Applications
The RFA described what information bidders should provide, with little indication of what would
result in a lower or higher score (e.g., “experience operating shared mobility device systems,”
“compliance record with Federal, State or local law,” and “device durability for shared use”). In
the Mobility Officer’s determination, however, it was disclosed for the first time that the Mobility
Officer would place “weight” on different criteria that were not described in the RFA, and which
often were not even related to the category that was being scored. To take only a few
examples1:
x In awarding points for “Compliance record,” the Mobility Officer “gave higher value to
operators who provided continuous operation even in financially strained and/or
pandemic conditions,” and “credit was also given to applicants with a history of seeking
non-existent e-scooter permits prior to operating.” Neither of these criteria were
disclosed in the RFA, and neither have any logical connection to a company’s
compliance with federal, state, or local law.
x In awarding points for “Device durability for shared use,” “[c]redit was given to systems
that showed strength in strategies to convert from driving or ridehail to shared mobility.”
This criterion was not disclosed in the RFA, and it has no logical connection to device
durability.
x In awarding points for “Sustainability of operations,” the Mobility Officer “credited
proposals that used ‘swappable batteries’ because they reduce operations VMT.” No
preference for swappable batteries was disclosed in the RFA, and as mentioned above,
swappable batteries do not actually make shared mobility operations more sustainable.
Had this criterion been disclosed up front, Bird could have submitted research and other
information on this topic.
1 This list is not exhaustive. For a point-by-point response to the Mobility Officer’s flawed analysis, see
Appendix A.
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x In awarding points for “Experience operating shared mobility device systems, and
financial viability and stability,” the Mobility Officer “credited a higher values [sic] to
applicants who directly employed staff at all levels, and do not contract out field services
to subcontractors.” No preference for direct employment over independent contractors or
other models was disclosed in the RFA.
In the context of public procurement,2 a request for proposals “must be sufficiently detailed,
definite and precise so as to provide a basis for full and fair competitive bidding upon a common
standard.” Konica Bus. Machines U.S.A. Inc. v. Regents of Univ. of California, 206 Cal. App. 3d
449, 456 (1988) (internal quotations omitted). “Bidders cannot be required to guess at the
standards by which they will be measured, and are entitled to expect that the bid that most fully
satisfies the specified criteria would be awarded the franchise.” Eel River Disposal & Res.
Recovery, Inc. v. Cty. of Humboldt, 221 Cal. App. 4th 209, 235 (2013). A public entity’s failure to
use correct and exclusive criteria to award a public contract constitutes an abuse of discretion.
Monterey Mechanical Co. v. Sacramento Regional County Sanitation Dist., 44 Cal. App. 4th
1391, 1413 (1996) (award to second-lowest bidder set aside where board used wrong criteria to
evaluate “good faith effort” of lower bidder to comply with affirmative action goals, beyond the
exclusive criteria of Cal. Pub. Contract Code § 2000).
The same principles apply here. The Mobility Officer abused her discretion by creating new
criteria, not disclosed in the RFA, only after all applications were received. Indeed, introducing
selection criteria at this stage opens the door to bad faith scoring that unfairly weighs criteria in
order to reach a preordained result. Even the possibility of such bias undermines the integrity of
the application process.
Because the City failed to disclose the criteria on which it would base its determination, it
violated basic principles of fairness enshrined in California law. At minimum, the Director should
reevaluate the Mobility Officer’s selections. If the Director intends to rely on the criteria
introduced for the first time in the Mobility Officer’s final selection memorandum, then it must
provide Bird an opportunity to supplement its application with information responsive to those
criteria. On reevaluation, the Director should select Bird as one of the final licensees based on
the strengths of its bid.
Based on the Information Available to Bird, the City Does Not Appear to Have
Followed a Fair or Objective Selection Process
The Mobility Officer’s selection memo discloses raw scoring numbers for the categories
specified in the RFA and the administrative regulations. But it provides no explanation
whatsoever for why bidders received the scores they did. Bird has filed a request under the
Public Records Act for this information, but has to date received no response.
2 Parallels to public contracting are appropriate here because the second pilot program is designed to
allow the City “to transition the City’s shared mobility device program from a permitting-based model to a
contracting-based mode [sic].” See Ordinance No. 2666 (Mar. 23, 2021).
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Under SMMC § 3.22.060(g), the Mobility Officer was required to send to all applicants and post
on its website, among other things, “the ranking determinations as to all applicants” and “all
portions of all applications other than those portions that applicants have specifically designated
with written reasons as exempt from treatment as public records.” The City failed to provide the
applications according to the ordinance. Instead, the City uploaded the applications with
redactions over a week after the Mobility Officer issued her decision and only a few days before
this appeal became due. According to communications that Bird has received from the City, it is
unclear why this information was withheld.
Regardless, the documents reviewed thus far have not substantiated the scoring decisions of
the committee or the Mobility Officer. Consequently, there is no evidence on record that would
show the City followed a fair and objection selection process. There is also good reason to
question the objectivity of the scoring because many of the scores Bird received make little
sense. For instance3:
x Bird received the same scores for “Experience” and “Local Preference” as Veo and Spin,
even though it has far greater experience than either of those companies (it operates in
dozens more cities than both those companies combined), and is the only bidder that
was founded, headquartered and currently operating in Santa Monica. In fact, Bird
currently employs double the number of people in Santa Monica than one of the selected
operators purports to employ during the program.
x Bird ranked lower on “device durability” than both Veo and Spin, notwithstanding that
Bird will use a best-in-class vehicle custom built for shared mobility, which uses state-of-
the-art safety features no other operator can match. The advantages of the Bird Three
scooter that Bird will use in Santa Monica are too many to list here; Appendix A captures
many of the advanced hardware and software features that are exclusive to Bird’s
vehicles. But critically, Bird’s vehicles are not just top of the line on paper; they are
backed by a wealth of vehicle lifecycle data earned through Bird’s years of operation in
Santa Monica and other markets–data that Veo and Spin simply do not have. Bird’s e-
scooter score appears to have been downgraded through a collective scoring of all of
Bird’s vehicle offerings, including e-bikes and alternative vehicles, even though the RFA
provides that “[i]f applicants propose multiple devices, each device will receive a
separate device score.” At minimum, only e-scooter vehicle durability should be used to
grade e-scooters.
x Although the Mobility Officer claimed to credit “systems that showed strength in
strategies to convert from driving or ridehail to shared mobility,” neither of the selected
two-wheel scooter applicants have a plan to reduce driving trips. Spin is owned by Ford
(for now), and its focus is on passenger automobiles, not micro EVs. Moreover, Bird
does, and unlike Veo and Spin, Bird’s vehicles can promote interoperability with transit
both in Santa Monica and in surrounding cities where Bird is licensed to operate and
Veo and Spin selected devices are not. Vehicles from Veo will not be able to cross city
3 For more examples of defects in the Mobility Officer’s scoring, please see Appendix A.
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boundaries because they are not permitted to operate in the City of Los Angeles. Bird
confirmed this with LADOT staff member Jose Elias on May 20, 2021.
x The Mobility Officer further purported to credit “applicants with existing partnerships that
are active for consumer use,” but neither of the top-ranked applicants have the depth or
quality of partnerships that Bird currently has with LADOT, TransitApp, and Perry’s Bike
Shop. Indeed, Veo’s application did not mention any existing partnerships.
x Even based on the criteria the Mobility Officer purported to use in determining the score
for “sustainability,” Bird met or exceeded those standards when compared with Veo or
Spin, yet scored lower in that category. Bird’s scooters last longer and need less
frequent charging than other operators’ vehicles, and Bird’s charging stations are local
while Veo’s and Spin’s are not. Bird has more and better sustainability partnerships than
Veo or Spin combined, and only Bird has committed to the United Nations Global
Compact for Sustainable Initiatives.
x Bird scored less in “affordability” than Veo even though Bird offers far more options for
reduced fares, which were developed through frequent feedback sessions with the
Santa Monica community, remarks from council members, and in-market testing. Bird
has developed the most affordable e-scooter pricing program anywhere in the world,
which has been and will continue to be available to Santa Monica residents.
Without any explanation for why applicants received the scores they did, and with Bird’s
application being far stronger than the winning applicants on several categories in which they
scored higher than Bird, the resulting rankings appear to follow from no objective criteria at all.
“The mere potential for abuses likely to arise from significant deviations from standards
designed to eliminate favoritism, fraud, and corruption . . . is a sufficient basis upon which to
grant judicial relief even without a showing that the deviations actually resulted in such abuses.”
Eel River Disposal, 221 Cal. App. 4th at 238 (2013). Given the appearance of bias and potential
for abuse, the City should reevaluate and rescore the bids, and Bird should be awarded one of
the final licenses.
CONCLUSION
For the reasons stated above, Bird appeals the Mobility Officer’s determinations and requests
that the Director render his own determinations of applicant ranking. Based on the merits of
Bird’s submission, we believe Bird should be selected for the Program.
As mentioned above, Bird has requested information from the City that it has not received by
the date of this submission. Bird reserves all rights to supplement this appeal with information
received after the submission of this appeal, including but not limited to information in response
to its Public Records Act request and information that the City discloses pursuant to SMMC §
3.22.060(g).
Bird further reserves all rights to seek judicial relief, including injunctive relief, from Los Angeles
Superior Court.
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Thank you for your prompt attention to this matter.
Sincerely,
Daniel R. Suvor
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Vernice Hankins
From:lindap_a@verizon.net
Sent:Sunday, June 27, 2021 9:03 AM
To:councilmtgitems
Cc:Kyle Kozar
Subject:Items 1A and 13A on your 6-29 agenda
EXTERNAL
Dear Councilmembers,
Regarding the issue of e scooters, I implore you to make it mandatory that these scooters be geo fenced so they are
inoperable on sidewalks. If allowed on sidewalks, they are hazardous to pedestrians.
Knowing that they are responsible for numerous injuries and even death, I am dismayed that you are even continuing
allowing them to operate in the city. I should not have to fear for my safety just walking down my street.
I live on 12th St., between Santa Monica Blvd and Broadway and scooter usage in my area is high.
A few months ago a scooter rider who was riding fast on the sidewalk almost broadsided my wheelchair bound husband
and myself as we were coming out from our building. A hedge blocked our view of the rider and so we were completely
startled. I'm just glad we were not hospitalized if we had collided.
Please also mandate that these scooter companies accept terms of cooperation when their riders operate the scooters
illegally, causing harm to others or creating traffic hazards. For example, these companies need to give the police,
hospitals, and insurance companies the names and information on riders who cause accidents or who are violating traffic
or other laws. Gig corporations seem to shirk their responsibilities in this regard; if they want to operate here so badly,
they can be more responsible.
Please also mandate that scooter companies respond more quickly to remove a scooter when it is parked blocking the
sidewalk, public access areas, or a handicapped access zone. I strained my back moving one out of the handicapped
zone so my husband could access our car. The companies take hours to come and remove the scooter when called. It
should be minutes, not hours.
Lastly, I am saddened that both items 1A and 13A revolve around the business and legal aspects of scooter company
selection rather than on any discussion of public safety and corporate responsibility. I would really like to believe that the
Council holds public safety as a priority, but these agenda items do not inspire confidence to that end.
Thank you,
Linda Piera-Avila
1424 12th St. Apt. E
Santa Monica, Calif. 90401
Item 1.A 06/29/21
1 of 2 Item 1.A 06/29/21
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Vernice Hankins
From:Epstein HP <hpewriter@yahoo.com>
Sent:Sunday, June 27, 2021 10:16 AM
To:councilmtgitems
Subject:Item 13A and Closed Session (please attach in both places)
EXTERNAL
Like a Zombie, Bird has once again reared its ugly head. Twice, City staff has refused to
approve the company doing business in Santa Monica in its pilot programs (Pilots are
supposed to give companies a chance to prove how well they perform). Bird failed. It proved
to be a poor corporate citizen during two trials.
For years, it allowed its customers to disregard law and public safety by riding e-scooters on
sidewalks and abandoning the machines in crosswalks, turning sidewalks into obstacle courses
for wheelchairs, baby carriages and pedestrians. And now, once again, despite its miserable
record, Bird wants to operate in Santa Monica.
The City doesn’t need 500 more e-scooters, many of which sit idle for days. The economic
impact is nil. Bird desperately wants to avoid being kicked out of Santa Monica because that
would be a black mark when it goes for its $1.5 billion public stock offering. The City Council
should say “no” and not be intimidated by Bird’s threat to sue. Residents will come to court in
droves to testify against its dismal performance.
The City has a duty to restrict businesses. Bird has no right to come in where it’s not wanted.
Harriet P. Epstein
Santa Monica resident
Item 1.A 06/29/21
2 of 2 Item 1.A 06/29/21
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