Lyft sues San Francisco to block Uber and other bikeshare competitors

Move prompted by SFMTA plans to expand permits for companies with ‘dockless’ services

The multi-billion dollar battle for the ride-hail market has officially spilled over into The City’s bikeshare industry.

Lyft has filed suit against San Francisco to block it from granting permits to its competitors, including the company’s ride-hail rival, Uber, to expand local bikeshare service.

In their complaint filed in San Francisco Superior Court, Friday, Lyft attorneys also said the company would seek a temporary restraining order against San Francisco from immediately granting any bikeshare permit while the suit is resolved.

Ford GoBike operates in the Bay Area under exclusivity agreements with cities including San Francisco that were negotiated by the Metropolitan Transportation Commission in 2015.

But since then the micro-mobility industry, as it’s called, has blossomed. Companies are attracting billion-dollar investments as they vie for city contracts to launch rental services for e-bikes, e-scooters, and even, incredibly, pogo sticks.

Amid that growth, San Francisco has allowed bikeshare operations from two companies that were eventually purchased by Lyft and Uber, respectively.

Lyft operates Ford GoBike, and Uber operates JUMP. In its suit, and in previous public statements, Lyft has argued that its exclusivity contract with San Francisco precludes other bikeshare operators from entering the market.

The San Francisco Municipal Transportation Agency, however, has argued that Lyft’s exclusivity agreement only covers bikeshare that uses sidewalk-adjacent stations or docks. Uber’s JUMP, on the other hand, is “dockless” and allows users to park its e-bikes on any sidewalk within its service zone.

“We are eager to continue investing in the regional bikeshare system with the MTC and San Francisco,” a Lyft spokesperson wrote, in a statement. “We need San Francisco to honor its contractual commitments to this regional program — not change the rules in the middle of the game. We are eager to quickly resolve this, so that we can deliver on our plans to bring bikes to every neighborhood in San Francisco.”

City insiders have speculated that Lyft would file such a suit for months.

Ford GoBike’s previous operator, Motivate, which Lyft later bought, entered into arbitration with SFMTA last year when the agency first tried permitting JUMP to operate. Eventually they reached a deal to allow a limited pilot, which has allowed JUMP to release only 500 bikes on city streets, versus Lyft’s promised fleet of 8,500.

Last month, amid those long-simmering tensions, SFMTA announced it would open its permit process to any dockless bikeshare operator and award those permits by July.

The agency said its move would bring more than 11,000 rentable bikes to San Francisco, and was hailed by local bike advocates as a forward-thinking step to tackle climate change.

But the announcement also prompted Lyft CEO John Zimmer to email SFMTA director Ed Reiskin personally to request a meeting to settle their dispute, a precursor to arbitration. In that letter, Zimmer said the point of the exclusivity agreement was to allow Lyft to invest millions in expanding its San Francisco fleet, knowing it would see a return on that investment.

Reiskin shot a letter back denying Lyft an arbitration meeting. He also stated that Lyft has no exclusivity rights to dockless bikeshare.

“Not only did we directly discuss this point on several occasions, but Lyft agreed to remove all references to ‘exclusivity’ from the regional agreement,” Reiskin wrote.

SFMTA’s interest in allowing dockless bikeshare to proliferate may partially stem from the public pushback Ford GoBike has faced since it launched in The City, insiders speculate. The installation of new Ford GoBike docks has been fought tooth and nail by neighbors in nearly every San Francisco neighborhood, amid fears of losing car parking.

Dockless bikes avoid that political problem.

Since Lyft and SFMTA have come to public blows, other entities have jumped into the fray as well.

Transport Workers Union Local 250-A, which primarily represents Muni bus and train operators, also counts Ford GoBike’s mechanics as union fellows through the Transport Workers Union of America.

In a letter to SFMTA, Roger Marenco, the leader of Muni’s union, blasted the agency for courting bikeshare operators without union workers.

“Many of the companies in the micromobility industry have deeply troubling anti-labor practices and records,” Marenco wrote. “As the Bay Area faces crippling economic inequality, we believe policymakers like you need to stand on the side of working families and support companies who are doing the right thing by their workers.”

Lyft may feel its has a particularly strong case based on SFMTA’s previous battle with Chinese bikeshare entity Bluegogo, which tried to operate in San Francisco in 2017, but met with pushback from local officials.

Back then, SFMTA argued that Bluegogo could not operate in San Francisco for one very specific reason: the launch “conflicts with the existing exclusive right the City has granted to another company for a bike share program,” SFMTA wrote.

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