Even in Silicon Valley, where disruption is the regional religion, it turns out that ignoring the authorities is not always a sure path for startup success.
On Friday, Leap Transit, a luxury bus startup that was beloved by San Francisco's tech crowd, listed at least three of its buses for sale on a commercial liquidation auction site.
The company announced it would temporarily shut down last month, after the California Public Utilities Commission served Leap with a cease-and-desist order on May 11. It initially launched in March, with $2.5 million in venture capital funding in the bank.
Leap — beloved by some, and hated by others for its $6 fares and air of startup superiority, reclaimed wood aesthetic and Blue Bottle Coffee service — existed tenuously in a legal gray area.
Like Uber and Lyft before it, Leap was in the midst of seeking state regulation for its premium bus service, hoping to skirt stricter oversight by local government. But in the meantime, with no city rules that applied to its service, it operated in a legal gray area.
Eventually, after I pointed this out to state and local authorities, regulators determined that Leap was breaking the law after all. Even then, Leap CEO Kyle Kirchhoff maintained that Leap was “in full compliance with all state and local laws.”
Prior to its regulatory scuffle, Leap also faced hefty criticism for removing wheelchair accessibility for its buses, which is required by federal law.
Kirchhoff did not respond to calls or e-mails. The company’s Facebook and Twitter accounts have been silent since May. And now with three of five buses on the auction block, Leap's days may be numbered.
If you're in the market for an attractively furnished startup bus, the auction kicks off on June 27. No word on whether the coffee bar is included.