Wrench in the gears for S.F. bike rentals
City seeks operators; Lyft claims exclusivity
San Francisco wants to quadruple its number of street-rented bikes to 11,000, saying it’s bullish on this clean, cheap, fun way to get around. The city is now seeking operators to deploy free-floating “stationless” bikes — electric and non-electric — for hourly rentals.
But it is facing objections from Lyft, which operates the Ford GoBike program, offering up to 2,000 bikes for hourly rentals that are parked in docks when not in use.
Lyft would provide the bulk of San Francisco’s planned expansion, with the addition of dockless e-bike rentals. But it wants to maintain its near-lock on on-demand bike rentals rather than allowing other companies to participate, saying it’s poured millions of dollars into setting up infrastructure and back-end systems based on a contract guaranteeing it exclusivity.
Lyft President John Zimmer wrote to the San Francisco Municipal Transportation Agency last month asking it to refrain from “posting, soliciting or accepting new permit applications from other (bike) opera
tors; or issuing new permits to other operators” until Lyft’s grievance about its contract being violated is heard.
Zimmer is also president of Bay Area Motivate, Lyft’s bike subsidiary, which it acquired last year for a reported $250 million. Motivate operates large urban bike-rental programs including Citi Bike in New York and Divvy in Chicago, as well as GoBike, which will soon be rebranded to remove “Ford.”
Instead of complying with Zimmer’s request, the MTA on Tuesday solicited vendors to apply to offer rentals of stationless bikes, saying it will make selections by July. Currently Jump, a subsidiary of Uber, is the only vendor allowed to do dockless rentals. It has 500 electric bikes in the city plus 50 in the Presidio under an 18month pilot program that expires July 9. The city hopes to have a decision on dockless vendors by that date.
“Obviously, the Lyftowned GoBike is the cornerstone and continues to expand,” said Tom Maguire, MTA director of sustainable streets.
While docks help organize parked bikes and provide convenient central locations to find bikes, they’ve also engendered controversy among residents who see them as promoting gentrification or don’t want to sacrifice parking spaces.
“A stationless system can help fill in the gaps where stations are yet to arrive or where stations are not required,” the San Francisco Municipal Transportation Agency wrote in a blog post Tuesday.
“The only course forward that makes sense is one that includes thousands more bikes for San Franciscans,” Maguire said, noting that the city is building protected bike lanes at a rapid clip.
The SFMTA said Lyft had misunderstood its contract and declined to enter a dispute-resolution process. While Lyft has an exclusive for docked bikes, “that exclusive right does not extend to stationless bike (rentals), including the hybrid stationless/station-based model Lyft proposed,” wrote Ed Reiskin, MTA former director of transportation, to Zimmer in midMay.
The MTA spent four months negotiating Lyft’s bike-rental plan, and assumed that it would apply to rent out up to 8,500 electric bikes that could be either docked or dockless, Reiskin wrote. The agency was surprised to receive Zimmer’s letter “threatening the very process that the parties have just successfully agreed to — the reopening of the permit application process.” Lyft did not express objections at an April 16 public meeting on the topic, he wrote.
Lyft has temporarily yanked all its e-bikes from city streets in April because of brake problems. It plans to start redeploying them in June, with its new hybrid models that can either be docked or locked to posts with a built-in cable.
Lyft’s contract is actually with the Bay Area’s Metropolitan Transportation Commission, which weighed in to support Lyft’s contention that its exclusive contract covers both docked and dockless bikes. That regional agency approved the 10-year contract with Motivate in 2015 to cover San Francisco, San Jose, Oakland, Berkeley and Emeryville.
“Exclusivity was a central element for Motivate to agreeing to foot the entire cost of delivering, installing, and operating a 7,000-bike (rental) system in the five participating cities,” SFMTC Executive Director Therese McMilan wrote to Reiskin and Zimmer this month. “It was clear that Motivate would not agree to do this if the participating cities were going to allow for point-to-point bike (rental) competitors.”
Lyft declined to say whether it might file a lawsuit.
“We value our publicprivate partnership with the City of San Francisco and the contract that has allowed us to work together to create a regional bike (rental) system,” Lyft said. “The most successful bike (rental) systems in the world are public-private partnerships underpinned by long-term private investment and a public planning process. In that spirit, we have spent many months working to meet SFMTA’s request for an expansion to 8,500 bikes beginning next month, and we intend to honor that commitment.”
Uber’s Jump is also eager to continue offering e-bikes when its current pilot ends in June.
“The evidence shows that riders win when bike (rental) companies compete in San Francisco,” Uber said. “We applaud the SFMTA’s decision to expand its (rental) program to allow more residents to benefit from this affordable and convenient new mode of transportation.”