Not really, this is how pilot programs generally always work. You limit the scope of the program for two reasons:

1. It keeps the program manageable, and it keeps the data more consistent. If the number of operators or scooters are constantly changing it makes it hard to actually draw any conclusions from the program.

2. The pilot program is being run because the SFMTA hasn't yet made the decision to allow this going forward (or they haven't finalized the rules governing it). Not having any restrictions on the program is basically the same thing as simply approving it, but the pilot program exists to determine if it should be approved and what rules it should be governed by.

> Regardless, the deadweight loss from this decision is substantial.

The theoretical loss under certain assumptions, true. What if it turns out that the usage of scooters actually produces a net economic drain in the city?

The pilot program limits the potential benefit, but it also limits the potential downside too.

> Also note specifically that a big issue with the taxi medallion system was that the quotas prevented the discovery of the equilibrium # of taxis. If we do not allow a market equilibrium to be reached, it's very easy for regulators to endlessly argue over the 'right' number without ever getting close to what the market actually wants. Politics has a lot of inertia -- the medallion system perpetuated itself for generations -- so I do not think you can understate the importance of bad precedent.

It sounds to me like you don't understand what a pilot program is. The pilot program only lasts a year, so these restrictions are only in place for a year. After the pilot program ends, the SFMTA will determine the new rules to use (assuming they decide to allow the scooters to continue operating at all) and the rules that governed the pilot program won't apply anymore.

Presumably the SFMTA will continue to require companies operating in this space to obtain a permit, but they'll also likely drop the "only 5 companies can participate" rule because that rule exists to limit the scope of the pilot program and keep it manageable. As for restrictions on the total number of scooters allowed, I guess that depends on the outcome of the pilot program. However, if the outcome is "2,500 scooters is better, or at least not worse, than 1,250 scooters" then the SFMTA is unlikely to put a cap on the scooters (since, as you said, they won't know what the optimal number is at that point).