Lyft Is Suing San Francisco to Keep Bike Rental Competitors Out

Ride sharing giant Lyft is fighting to retain total control of the docked and dockless bike share market in San Francisco, the Verge reported Friday, and has filed a lawsuit that its contract prohibits the San Francisco Municipal Transportation Agency (SFMTA) from issuing permits to competitors.

Per the San Francisco Chronicle, Motivate, which Lyft acquired for a reported $250 million last year, operates the docked Ford GoBike program under a 10-year contract with the regional Metropolitan Transportation Commission (MTC) signed in 2015.

(The MTC program offers both regular and electric bikes in several cities, though the latter kind were pulled off the streets in April amid reports of braking problems and “dozens” of injuries.) The only competitor in San Francisco is Uber subsidiary Jump and its fleet of dockless bikes, which are operating under an 18-month pilot program that is due to expire soon; “Lyft said it granted a one-time exception to its exclusivity for that test,” according to the Chronicle.

Last month, the SFMTA began seeking applications for dockless bike rental operators as part of a strategy to increase the total number of bikes available to 11,000. The Chronicle wrote that Lyft is insisting that its contract with the city grants them exclusivity over both docked and dockless rentals and is asking for a “preliminary injunction or temporary restraining order” preventing the agency from issuing new permits:

The lawsuit says that political pressure may have impelled San Francisco to renege on the deal.

“Motivate … believes that Jump and/or its parent company Uber are actively lobbying certain San Francisco officials to allow Jump to expand its e-bike presence in San Francisco notwithstanding Motivate’s exclusivity,” it said.

Lyft also contests that it invested heavily (to the tune of tens of millions of dollars) in the project and associated infrastructure because it was under the impression that it would be the sole game in town. The MTC agrees with Lyft and says the contract was indeed written to be exclusive, the Chronicle added.

“We are eager to continue investing in the regional bikeshare system with the MTC and San Francisco. We need San Francisco to honor its contractual commitments to this regional program—not change the rules in the middle of the game,” a Lyft spokesperson told the Verge. “We are eager to quickly resolve this, so that we can deliver on our plans to bring bikes to every neighborhood in San Francisco.”

John Coté, a spokesman for City Attorney Dennis Herrera, told the Chronicle in a statement that Lyft simply misunderstood the terms of its contract.

“The agreement between Motivate and the city was about a docked bike (rental) system,” Coté wrote. “It does not give Lyft the right to a monopoly on bike (rentals) in San Francisco. Lyft can seek a permit for dockless bikes on equal footing with everyone else.”

Source