Lyft has been fined every quarter this year, including a $209,000 fine at the beginning of August for a lack of available bikes in The City. (Kevin N. Hume/S.F. Examiner)

Lyft fined $200k for bike shortages, but may not need to pay

Lyft was smacked with a $209,000 penalty earlier this month for a lack of available bikes in its Bay Wheels bike-share program.

Those Bay Wheels e-bikes were taken off the streets following issues with batteries catching fire, and more traditional pedal-bikes were taken off the streets following braking issues.

But while some transportation advocates around San Francisco are celebrating the fine as a win, hoping it encourages Lyft to bring its bike back quicker, it comes with a big caveat: Due to a contractual agreement, transit officials said, Lyft may not have to pay the whole penalty, or even part of it.

By contract with the Metropolitan Transportation Commission, Lyft is only required to pay penalties to 4 percent of the revenue it makes from the Bay Wheels program each year. But the company has already paid penalties earlier this year that add up to 4 percent of projected revenue, according to the San Francisco Municipal Transportation Agency.

While those numbers are not yet final, since the year has not yet ended, it may mean that this most recent penalty levied against Lyft will exceed that cap, and not need to be paid.

Lyft has been levied damages for various contractual reasons every quarter this year, the company confirmed.

The lack of available bikes continues to madden San Francisco bicyclists. Brad Williford, co-founder of bikeshare advocacy group Our Bikes, said it would be far less impactful if San Francisco did not have an exclusivity contract with Lyft, and other companies were allowed to compete.

“The ongoing operational challenges that Lyft has faced with Bay Wheels continue to negatively impact people who rely on bike share in San Francisco,” he told the San Francisco Examiner. “Every day without access to bikes is a further argument for a resilient bike-share network with multiple operators.”

The Metropolitan Transportation Commission did levy damages against Lyft for its lack of bikes, since its bike availability hit a low of 67 percent in April, 60 percent in May and June. Bike availability cannot drop below 90 percent, according to MTC.

“This quarter shows great concern in many areas of operations, especially bike availability, rebalancing and bike maintenance,” wrote MTC Deputy Executive Director of Policy Alix Bockelman, in a letter to Lyft CEO John Zimmer, on August 2. KQED News first reported the letter and subsequent damages.

Lyft’s exclusivity agreement with Bay Area cities comes with a requirement that those bikes be available, set to certain standards. When Lyft’s Bay Wheels program falls short of those standards, MTC can slap the company with penalties.

The penalty does not go to MTC, but is instead distributed to partner cities.

In 2018 Bay Wheels — then called Ford GoBike — racked up $3 million in ridership revenue, making its penalty payment owed $122,839, according to MTC. That’s a little more than half of just this one penalty from August.

The SFMTA, which would benefit from those penalties, told the Examiner “both last year, and project this year, we’ve reached that cap within the first half of the year.” Translation? The limit on what Lyft would be held to paying was likely reached by June.

So that $209,000 penalty this month? Lyft may not even have to pay it.

A Lyft spokesperson said rider safety is first, which is why their bikes are off the road, for now.

“Putting rider safety first has reduced our bike availability, and we’ll certainly have to pay penalties for it — but we know it was the right thing to do. The (contract cap) process is a good way to make sure our incentives are aligned with our public sector partners, and we’re eager to continue improving our operations,” a Lyft spokesperson wrote.

joe@sfexaminer.com

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