Bay Area Bike Share Battle Has Vast Ramifications
10:22 AM PDT on June 4, 2019
The battle over bike share in the Bay Area between Uber and Lyft could have lasting implications for the future of public cycling — and, indeed, capitalism itself.
The two companies have circled each other warily like racers in a velodrome — Uber with dockless Jump e-bikes and Lyft with its docked Ford GoBikes — since 2018 when both publicly traded multi-billion-dollar companies acquired rentable bike start-ups.
But the transportation nemeses could be facing off this summer now that San Francisco wants to quadruple the number of bikes in its bike share program to 11,000 this year, dramatically expanding docked rental bikes, plus extending an existing pilot program for dockless bikes. The San Francisco Municipal Transportation Agency announced last week it will allow companies, such as Uber, Lime, and Spin, to apply for new two-year permits to operate dockless electronic bikes by July. That follows an 18-month pilot program for electric, stationless bikes that the SFMTA, which oversees transit, streets and taxis in San Francisco, created in January 2018.
That could cripple Lyft, which believes it has an exclusive contract for its Ford GoBike program with the Metropolitan Transportation Commission, the regional transportation planning agency that finances roads, highways, and transit systems in the Bay Area. Lyft inherited the contract to provide a bike share system in the Bay Area’s nine counties when it purchased Motivate, the company that had made the agreement with the MTC in 2015.
Lyft President John Zimmer threatened a lawsuit to halt the SFMTA from awarding permits to competitors, saying in an April 28 letter the company already “invested millions of dollars to install bike station infrastructure” in anticipation of being the city’s sole bike share operator.
Yet SFMTA officials claimed Lyft did not understand the contract, which was only for a “docked, station-based bike-share program” and the agency could award permits to stationless e-bikes. Instead, the city encouraged Lyft to develop a new 50-pound bike that includes both features — allowing it to be docked at stations around the city while containing an electric lock on the rear wheel activated by smartphone. That’s the new electric bike that will hit the streets of San Francisco in June (even as New York City and Washington, D.C. have to wait months for their e-bike fleets to be restored after a repair crisis).
That interpretation surprised MTC leaders, who countered the “definition of bicycle is silent on any distinction between station-based and dockless bicycles.” MTC Executive Director Therese McMillan urged the SFMTA and Lyft to reach a resolution, noting the company would not “foot the entire cost of delivering, installing, and operating a 7,000-bike share system … if the participating cities were going to allow for point-to-point bike share competitors for a specified period.”
If the SFMTA proceeds with issuing permits this summer, San Franciscans could have the option of choosing Jump or Ford GoBikes clustered in the same locations, putting the bike share foes in direct competition with each other in the same area.
Cyclists hope that there’s room in Frisco for both Lyft and its e-bike rivals.
“San Francisco has proven that bike share is most successful when it is affordable, accessible, and equitable,” said San Francisco Bicycle Coalition spokeswoman Rachel Dearborn. “We support expanding bike share — regardless of what company or companies run it — so that all people in San Francisco have more ways to get around.”
Some transit advocates say that Lyft shouldn’t be afraid to make room for Uber since it would make both companies better operators and lower the cost of rides, which would be a win for customers.
“Ask any Ford GoBike user and they’ll tell you that bike availability has always been a problem,” Our Bikes co-founder Brad Williford wrote in a San Francisco Examiner op-ed. He also argued Lyft hasn’t been staffing bikes in stations regularly. “That leaves users stranded and forced to seek other options such as rideshare. It’s disappointing that Lyft is advocating for a monopoly when it’s unable to deliver on its current service agreement.”
Uber certainly stands to benefit the most when San Francisco reopens its permit process. The company acquired the bike-share start up Jump in April 2018 for about $200 million — about four months after Jump received a temporary permit from the SFMTA to launch 250 pedal-assist e-bikes in a pilot program for dockless bicycles.
By July 2018, Lyft spent $250 million on the bike share start-up Motivate, which operated Citi Bike in New York, Chicago’s Divvy, D.C.’s Capital Bike Share, and Boston’s Bluebikes, accounting for 74 percent of the 35 million bike share trips taken in the United States. The company also inherited Motivate’s 2015 Bay Area agreement and operated about 2,000 docked bikes on the street before it had to remove about 800 pedal-assist electric models in April because of a faulty brake problem.
But the conflict between Uber and Lyft encapsulates a broader debate over how transportation should work — whether cities should allow freewheeling capitalism to take place on their streets or assume a top-down approach over for-profit vendors, a scheme often called a “public-private partnership.” (The name is a misnomer in many cities; in New York, for example, the city puts no public money into its arrangement with Lyft, which maintains a monopoly.)
San Francisco and Sacramento, where Uber’s dockless e-bikes have proliferated, are templates for the future of bike share, an Uber spokesman said, allowing the company to shift its dockless inventory to different areas of those cities to meet cyclist demand, such as a concert or a sporting event.
Lyft executives fear competition will kill bike share. Start-ups that launched bike share systems in smaller cities such as Durham, N.C., Camden, N.J., and Boise ended up pulling out once their permits were up. Some shifted their business model to electronic scooters after determining there wasn’t enough revenue in bicycles, despite cooperation from city agencies.
Lyft’s most successful bike share system is New York’s Citi Bike, which celebrated its sixth birthday this Memorial Day and had its ridership rise 7.8 percent last year. The company touts its public-private partnership with the city as a model for bike share since its bikes and stations have been integrated into the city’s transportation planning over the long-term. Uber meanwhile has made inroads by lobbying the city to introduce dockless e-bikes, which are deployed in several neighborhoods outside the Citi Bike monopoly zone.
For now San Francisco is looking to have the best of both bikes. Lyft recently reached an agreement with SFMTA to expand its fleet to 4,500 Ford GoBikes plus another 4,000 e-bikes beginning in June.
“We value our public-private partnership with the MTC and participating cities and the contract that has allowed us to work together to create a regional bike share system,” said Lyft spokeswoman Julie Wood. “We’re excited to bring a new hybrid e-bike that can be docked at stations or locked to public infrastructure to the system.”
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