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08.06.2019
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Lyft is suing San Francisco to prevent competing bikeshares from moving in

Photo by Justin Sullivan / Getty Images

Lyft filed a lawsuit against San Francisco today claiming city authorities are violating a contract it has with the ride-hailing company that gives Lyft exclusive rights to operate bike-share programs in the area. San Francisco’s Municipal Transportation Agency, on the other hand, says it has the authority to sign partnerships with dockless (also called stationless) vendors, and that Lyft’s contract gives it exclusivity only on docked bike shares. Lyft is seeking a temporary restraining order to prevent the city from issuing bikeshare permits to new vendors.

As of today, Lyft owns the company Motivate, which operates the Ford GoBike bikeshare program in San Francisco, a docked program that until very recently offered both electric and non-electric bikes, among many others around the country. (Lyft pulled the e-bikes off city streets in April following reports of dangerous malfunctions.) No other company save Uber-owned Jump operates a bikeshare in the city, but Uber’s is a dockless option. Lyft says Uber was granted an exemption under its contract because Motivate was not able to deploy its own dockless option at the beginning of 2018. Uber’s license was for 18 months and 550 bikes across the city, and it expires next month on July 9th.

With Uber’s license expiring, Lyft now claims the city of San Francisco is trying to expand bikeshare providers in violation of a 2015 exclusivity agreement the Bay Area’s Metropolitan Transportation Commission signed with Motivate, which Lyft acquired last year for around $250 million. Effectively, Lyft says San Francisco, which agreed to the contract terms as part of the MTC, is breaking the rules by soliciting new dockless providers. As part of the contract, Lyft says Motivate agreed to invest tens of millions of dollars in building out the infrastructure necessary to create its bikeshare and expand it over time in exchange for exclusivity.

Lyft says it has a 10-year exclusivity agreement lasting until 2025 on bikeshares in the Bay Area

“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 tells 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.”

The dispute isn’t coming out of the blue. Lyft has been feuding with San Francisco regarding this contract for months. According to a San Francisco Chronicle published late last month, Lyft President John Zimmer wrote the city’s MTA demanding it stop “posting, soliciting or accepting new permit applications from other (bike) operators; or issuing new permits to other operators” until the alleged violations of Lyft’s contract could be discussed. The city’s official position is that Lyft misunderstands the terms of its contract with the regional Bay Area MTC, and San Francisco refused to enter dispute-resolution process. As a result, Lyft sued.

“As we will explain to the court, the agreement between Motivate and the City was about a docked bike share system,” John Coté, a communications director for the office of San Francisco city attorney Dennis Herrara, said in a statement given to TechCrunch. “It does not give Lyft the right to a monopoly on bike sharing in San Francisco. Lyft can seek a permit for dockless bikes on equal footing with everyone else.”

San Francisco wants to expand the number of bikeshare vehicles from Motivate’s current 2,000 to more than 11,000, and it wants to do so with the help of new, dockless providers. Lyft says Motivate has committed to expanding its fleet to 8,500 vehicles, and it wants to do so with both docked and dockless vehicles starting as soon as next month the help of the electric units its redesigned to avoid the breaking issues that got them pulled off city streets.

The core of the dispute is whether Lyft’s contract does indeed cover both docked and dockless bikeshares. Regardless, this disagreement seems destined to be settled in court, as San Francisco doesn’t seem eager to settle the matter privately.

Lyft-Motivate v. The City of San Francisco by Nick Statt on Scribd

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