A cyclist on a JUMP bike rides up Mission Street on Wednesday, Jan. 23, 2019. (Kevin N. Hume/S.F. Examiner)

SF bikeshare fleet set to nearly quadruple — but Lyft is trying to stop it

City announces new permits for dockless companies

Bikeshare — everywhere.

That’s the vision for San Francisco’s burgeoning bike rental industry.

The San Francisco Municipal Transportation Agency on Tuesday released permit applications for more companies to provide “dockless” or “stationless” bikeshare in The City, citing soaring demand for the service.

The announcement means the number of bikeshare bikes on the street could soon nearly quadruple to 11,000, according to the SFMTA. The agency plans to announce who will be awarded permits by July.

But multi-billion dollar ride-hail company Lyft has threatened a legal challenge, citing an exclusivity agreement to operate Ford GoBike in San Francisco, according to a letter to the SFMTA obtained by the San Francisco Examiner.

In that April 28 letter, Lyft President and co-founder John Zimmer argued that the company “invested millions of dollars to install bike station infrastructure” that resulted in “losses that were incurred in reliance upon the Grant of Exclusive Rights.”

Zimmer invited SFMTA to a “dispute resolution process” through the Metropolitan Transportation Commission, and asked that “San Francisco refrain from taking actions that would prejudice” those proceedings, including “soliciting or accepting new permit applications from other operators.”

A little more than a month later, SFMTA announced its expanded permit program for dockless bikeshare, flying directly in the face of that request.

In a response to Zimmer, SFMTA Director of Transportation Ed Reiskin wrote that Lyft’s exclusivity agreement only applies to bikeshare with docks — not the newer “dockless” model of 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” with Bay Area cities, Reiskin wrote. “The SFMTA’s ultimate goal is to secure the highest quality bikeshare system for the residents of San Francisco.”

SFMTA’s planned expansion could spur a major shift in bicycle availability, one that advocates said may make bikeshare a more appealing transportation option. Currently, only one company, JUMP, has a permit to offer a dockless bikeshare service in San Francisco.

“San Francisco has proven that bikeshare works best when it is affordable and accessible to as many people as possible,” said Brian Wiedenmeier, executive director of the San Francisco Bicycle Coalition. “We’re excited to see even more bikes in the city of San Francisco giving people across our city a healthy affordable and sustainable way to get around.”

The battle to expand bikeshare has intensified behind the scenes since Lyft has taken over Ford GoBike, and Uber operates its rival dockless bikeshare company, JUMP. The ride-hail giants are duking it out not only on four wheels, but on two.

An Uber spokesperson confirmed to the Examiner it plans to apply for SFMTA’s new dockless bikeshare permit program.

“The evidence shows that riders win when bikeshare companies compete in San Francisco,” an Uber spokesperson wrote, in a statement. “We applaud the SFMTA’s decision to expand its bikeshare program to allow more residents to benefit from this affordable and convenient new mode of transportation.”

Previously, San Francisco allowed only Ford GoBike, which uses fixed docks, to operate within The City.

Lyft has an exclusive agreement with San Francisco and other Bay Area cities to operate what is viewed by some critics as a bikeshare monopoly.

When SFMTA awarded a permit to rival bikeshare company JUMP in 2017 to operate a dockless service, the former operators of Ford GoBike, Motivate, took SFMTA into arbitration over the matter. Some advocates feared it would lead to a lawsuit that would deadlock bikeshare availability for years to come.

That threat still looms. In Zimmer’s letter to SFMTA in April, he wrote “the value of a long-term contract like ours is that it allows a company to make large upfront investments in the infrastructure required for reliable and organized large-scale bike deployment and e-bike charging.”

Essentially, Lyft argued, they could only take heavy losses investing in bikeshare docks because they were promised a monopoly, knowing that they could recoup their investments later on. Expanding bikeshare to dockless permittees threatens Lyft’s ability to make that money back, Zimmer wrote.

SFMTA argued since JUMP featured dockless e-bikes that could be parked anywhere, the permit did not violate the exclusivity agreement with Ford GoBike. JUMP was allowed what was perceived as an exception to that exclusivity agreement, and operates 500 dockless e-bikes citywide, with additional bikes available in the Presidio.

For its part, SFMTA cooked into Tuesday’s announcement a nod to docked versus dockless bikeshare.

“A stationless system can help fill in the gaps where stations are yet to arrive or where stations are not required,” the agency said in a blog post. “We see the combination of both systems as the best fit for our unique City and an important part of our transportation network.”

The agency added that Lyft and Ford GoBike, “has an exclusive contract to provide bikeshare stations in San Francisco.”

Note, the agency specifically wrote Lyft has exclusivity to provide bikeshare “stations,” and not bikeshare as a service.

For now, advocates are singing the praises of the SFMTA’s move to expand bike availability.

“I’m thrilled the SFMTA is announcing this bold plan to dramatically expand bike share,” said Brad Williford, co-founder of the advocacy group “Our Bikes,” which has pushed for better access to bikeshare.

“Soon instead of Lyfts and Ubers clogging our streets and bike lanes,” he added, “everyone will have the option to instead hop on an ebike and get to their destination quicker, healthier and cheaper.”

joe@sfexaminer.com

This post has been updated to reflect a challenge by Lyft to the dockless permit program.

UPDATE 5/29, 12:07 p.m.: Lyft did not return requests for comment before this story published. On Wednesday, Lyft said it was offering its own expansion to San Francisco bike riders.

At a little-attended Metropolitan Transportation Commission meeting May 10, Lyft revealed it would expand its number of bikes to 4,500 in San Francisco, and its e-bikes to 4,000, for a total of 8,500 new bike rentals available in The City.

One of its new offerings would be a previously unrevealed new bike that Lyft had heavily invested in at the request of SFMTA: a bike that could also be parked anywhere in a “dockless” fashion. Lyft plans to launch this bike in June.

“We value our public-private partnership with the City of San Francisco and the contract that has allowed us to work together to create a regional bikeshare system,” a Lyft spokesperson wrote in a statement. “The most successful bikeshare systems in the world are public-private partnerships underpinned by long-term private investment and a public planning process. In that spirit, we have spent many months working to meet SFMTA’s request for an expansion to 8,500 bikes beginning next month, and we intend to honor that commitment.”

The Metropolitan Transportation Commission also weighed in on the debate, in a letter obtained by the Examiner Wednesday. Therese McMillan, executive director of MTC, wrote that in the exclusivity contract, “the definition of bicycle is silent on any distinction between station-based and dockless bicycles.”

MTC would manage any arbitration between Lyft and SFMTA, as laid out in the bikeshare contract.

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