Raleigh is about to become one of the more expensive places for electric scooter businesses to operate, if not the most expensive.

The city could collect as much as $450,000 a year if companies deploy the maximum amount of scooters allowed by the Raleigh City Council.

The council Tuesday approved a Master Encroachment Agreement for dockless electric scooters. 

The policy includes rules and regulations for riders and companies. The Raleigh Department of Transportation expects to finalize the terms of the agreement by the end of the month after the council made a few modifications during its Tuesday meeting.

The biggest change is the fee the city plans to require operators to pay. Director of Transportation Michael Moore proposed a $100 annual fee for each scooter in a company’s fleet. He said his team looked at other cities to see what they charge.

“It varied (from a low of) $25 per scooter but with a higher kind of fee on top of that to I think the highest we’d seen was about $130 per scooter,” Moore said.

During the October 16 meeting to discuss parts of the city’s policy, Councilman Dickie Thompson called for a higher fee.

“$100 per scooter is not enough because the taxpayers should not have to burden themselves for paying for this, for these companies to come here at our expense. (The companies) need to bear the burden of the cost, because we’ve got to increase staff of the police department,” Thompson said in October.

“We’ve got to start writing tickets for the offenders. Until they stop (riding improperly), we run the risk of someone getting hurt or killed. I’d like to make the motion that we increase the fee per scooter to $150.”

The draft submitted to the council on Tuesday had that $150 fee, but Thompson made a motion for another increase.

“This is a good document. Y’all spent a lot of time on this. I appreciate it, but there’s going to be a lot of cost to the city to administer this, and also to start enforcing these regulations. I’d like to move for approval of this document with these changes, and instead of $150, it should be $300,” he said.

None of the other council members voiced any objection to the increase.

Brent Woodcox, a Raleigh attorney, runs the YIMBY Raleigh organization to advocate for development, innovation, and inclusion. He said the two companies currently in Raleigh may decide that they are no longer interested in doing business here.

“Raleigh is trying to be the worst city in the country to operate scooters,” Woodcox said.

Neither Bird nor Lime responded to multiple requests for comment. But Moore said the two companies told him that $100 per scooter seemed high.

“It’s a hot market, I’m sure folks have seen the utilization that they’ve got. I’ve heard that they’ve got and maintain really good utilization numbers to date, so it could just be matters of dollars and cents,” transportation director Moore said.

The Master Encroachment Agreement caps the total number of scooters in Raleigh at 1,500. Companies must operate a fleet of at least 50 but no more than 500. This allows for a third company to come to Raleigh, and possibly more depending on how many scooters they deploy.

Bird currently has more than 1,000 scooters spread across the city, and will be forced to cut its fleet by more than half.

Councilwoman Nicole Stewart argued against the cap of 1,500. She encouraged a flexible system based on ridership, which she said may change with the weather.

“Right now one of the companies uses a baseline of three rides per day (per scooter). If they maintain an average of three rides per day, then they’re at a good number. If they increase to four rides per day, then they’ll add more scooters,” Stewart said.

“If they decrease to two or one rides per day, then they would decrease the number of scooters. We may see a decrease in ridership this winter as things get cold. I really kind of like this idea of a utilization cap as opposed to just an arbitrary 500 cap per company.

The other key modification made to the agreement Tuesday is moving the time scooters can be made available for use from 6 a.m. to 5 a.m.  All scooters must be collected at 10 p.m. each night.

The current policy has an end date of July 31, 2019. Moore said this will allow the Raleigh Department of Transportation and other city leaders to assess the agreement’s effectiveness and determine what changes, if any, should be made.

“It gives us enough time to understand what the true cost of the program is, so we won’t necessarily be overcharging at the beginning or drastically undercharging at the beginning, but it would give us a period of time to have some learning,” Moore said.

The city is also seeking Requests for Proposal from the various scooter companies as part of an operational selection process.