Lyft sues San Francisco over e-bikes

San Francisco announced in May that it planned to add roughly 11,000 new bicycles to its bike share programs, quadrupling the current availability while implementing requirements that bike share companies circulate more vehicles in neighborhoods like the Inner Sunset, Western Addition, Inner Richmond, Mission, and Bayview.

It’s all part of the San Francisco Municipal Transportation Agency’s (SFMTA) “Stationless Bikeshare Program Application,” meant to correct an “an imbalance in fleet distribution” by issuing more permits to qualifying companies and putting more bikes on streets.

But there’s a potential roadblock: Ride-hailing company Lyft filed suit Friday against San Francisco in SF Superior Court. The company claims that the bike share plan shafts Lyft on the deal it made with the city for its docked Ford GoBikes in 2015.

The suit, “Bay Area Motivate LLC v City and County of San Francisco,” says that Lyft is supposed to have first dibs on the city’s bike dealings. (Motivate is the bike company owned by Lyft that oversees the Ford GoBike program; Ford Motor Company is a sponsor with naming rights on the bikes but doesn’t administer the program)

According to the complaint:

Motivate brought an innovative proposal to San Francisco and the Bay Area, a public-private partnership where Motivate would invest millions of dollars to establish a bike share program [...] with a robust back-end technology, and at no cost to taxpayers. In exchange [...] Motivate would have the right to be the exclusive bike share operator in the region for the term of the agreement.

[...] San Francisco is now reneging on its contractual obligations to Motivate by threatening to implement a multi-vendor bike share system [...] and has now opened a permit process that could place thousands of bikes from other operators on the streets of San Francisco.

Motivate lawyers say that the contract gives Lyft exclusive access to “the public right of way” for rental bikes.

According to the suit, the company “borrowed tens of million” of dollars to execute the GoBike program in SF and is “years away from recouping” the investment. Giving access to its competitors exacerbates this financial hardship, according to the complaint.

The city sees the case differently; SFMTA contends that Lyft and Motivate have exclusivity when it comes to bike stations in SF, but dockless bikes like those peddled by competitor Uber (in the form of red Jump bikes) are a different service and not covered by the previous bargain.

Right now Uber’s Jump bikes are the only dockless bicycle rentals in SF, but that could change if SFTMA’s expansion moves forward.

John Coté, a spokesperson for the SF City Attorney, told TechCrunch that Lyft doesn’t have “the right to a monopoly on bike sharing in San Francisco.” He added that “Lyft can seek a permit for dockless bikes on equal footing with everyone else” while still maintaining their contractural advantage with bike stations.

Friday’s suit requests an injunction before SFMTA begins handing out new bike applications, which if granted could put the brakes on the planned expansion for years while courts resolve the litigation.