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What a Bay Area Dispute Says About the Future of Bike Share

There are few things better than riding a bike: breeze in your face, legs pushing languidly, mastering physics to balance, miraculously, on just two wheels. So it’s a shame that the bicycle is caught in the messy world of San Francisco politics, complete with interagency grousing, rivalry between billion-dollar public companies, and plenty of official letterhead.

The dispute, while in many ways particular to the Bay Area, could push cities to change how they think about dealing—and contracting—with the new breed of bicycle- and scooter-share companies seeking access to public sidewalks. For advocates prodding cities to promote cleaner transport options like bicycles, scooters, and public transit, it’s a reminder that their values don’t always align with those of the private companies with which they’ve sometimes allied.

To understand the San Francisco dispute, you first need to understand the changing face of bike-share. What was once fierce competition among startups is now often competition between newly public giants. In April 2018, Uber acquired the dockless-bike-share company Jump for $200 million. A few months later, Lyft began to acquire its own bike-share company, Motivate, for $250 million. Motivate is the largest bike-share operator in North America and has exclusive contracts to run programs in cities like New York (CitiBike), Washington (Capital Bikeshare), Chicago (Divvy Bikes), and the Bay Area (GoBikes)

For a time, San Francisco treated its contract with Motivate as truly exclusive. In 2017, the city’s transit agency told the since-expired Chinese dockless-bicycle company BlueGogo that it couldn’t operate in the city. But the city changed its position later that year when it decided to launch a dockless-bike pilot program. Motivate objected to what it viewed as a violation of its exclusive contract. The city and the company ultimately compromised on a limited, 18-month dockless pilot program; Jump won the first permits. Today, 500 Jump bikes operate in the city, to strong demand: 63,000 riders took more than 625,000 trips in the first year of San Francisco service, Uber says.

Now the 18-month pilot is about to end, and San Francisco wants to make it permanent. This week, the city announced it would open a permitting process, with the goal of getting 10,000 to 11,000 shared cycles on its streets, a fourfold increase over what it has today.

But the commercial backdrop is very different than 18 months ago, now that Uber owns Jump and Lyft owns Motivate. Lyft is unhappy with the city’s plan to open up the bike-share permit process, even though the city says it anticipates 8,500 of the shared bikes would be Lyft’s GoBikes. In an April letter to city transportation director Ed Reiskin first reported by the San Francisco Examiner, Lyft CEO John Zimmer said the company had “invested millions of dollars to install bike station infrastructure for a large scale bike share system” that it might not be able to recoup without exclusivity. Zimmer asked for a new round of arbitration.

On May 15, the city told Lyft it believes Motivate has an exclusive contract to run “a docked, station-based bike-share program” in San Francisco, but not the exclusive right to operate a bike-share program. The regional Metropolitan Transportation Commission, which orchestrated the original Motivate contract, also weighed in, noting in a May 20 letter that contract’s definition of “bicycle” is “silent on any distinction between station-based and dockless bicycles.”

San Francisco cycling advocates worry the dispute may prevent the expansion of bike-share programs in the city, at a time bicycles could be booming. (After a woman on a GoBike was struck and killed by a truck in March, public officials committed to building 20 miles of new protected bike lanes in the next two years.) “More bikes are better, from our viewpoint,” says Brian Wiedenmeier, executive director of the San Francisco Bicycle Coalition. “If, in the end, this results in less access, that would be unfortunate.”

Brad Williford, another local bicycle activist, agrees. “I’ve seen how competition has improved the bike-share service in the city,” he says. “I’m really proud of the [city] for taking a stand.”

In a statement, an Uber spokesperson said the company supports San Francisco’s decision to open up the permit process. “The evidence shows that riders win when bike-share companies compete in San Francisco,” the spokesperson said.

A Lyft spokesperson said the company looked forward to expanding its GoBike program in San Francisco and that Lyft would add its own dockless bikes to the system. “The most successful bike-share systems in the world are public-private partnerships underpinned by long-term private investment and a public planning process,” the spokesperson said.

The complicated governance issues with the Bay Area bike-share dispute are, in some ways, sui generis. Lyft recently won an expansion of its bike-share contract in Chicago, making it the exclusive operator of bike-share—docked, dockless, or electric—in the city. Despite a local lobbying press by Uber, Lyft reached an agreement through City Council to invest $50 million over three years to build out its Divvy program.

Even so, Uber is pressing to get its Jump dockless bikes into other putative Lyft territory. In New York, Uber lawyers have urged the city to create a permanent dockless e-bike program.

Those cities are, no doubt, watching the debate in the Bay Area—and wondering how they might use bidding processes to play multiple companies off each other, forcing them to compete on price and service. “It’s really going to change the game,” says Williford, the activist. “If San Francisco gets more from Lyft and Jump, that’s a really strong model for what New York should be demanding.”

Meanwhile, it’s an open question whether anyone can make money from bike-share. Both Uber and Lyft hope to become Amazons of transportation, one-stop shops for ride hailing, bicycles, scooters, and even public transit. But Lyft’s first quarterly earnings report, released this month, noted that it didn’t expect its bike- or scooter-share businesses to materially increase revenue in the short term. Uber CEO Dara Khosrowshahi, whose company released its first quarterly earnings Thursday, told investors that gross bookings for bikes and scooters “grew strong quarter over quarter”. But the company still lost $1 billion in the first part of 2019.

Corrected, 6-3-19, 3:40pm: An earlier version of this story incorrectly said Lyft defended an exclusive bike-share contract in Chicago. The new contract expanded Lyft's exclusivity.

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