A new Bay Wheels e-bike from Lyft stands at Daggett Plaza on 16th Street on Monday, June 10, 2019. (Kevin N. Hume/S.F. Examiner)

SF sets a high bar for Lyft on electric bike rentals

Newly spelled out city requirements could open the door for other e-bike providers

The City is taking a harder line with Lyft in requiring its bikeshare e-bikes to be available in San Francisco at all times, the San Francisco Examiner has learned.

And those strict new rules could potentially set the stage for The City to allow other bikeshare operators in San Francisco to offer e-bikes if Lyft fails to comply, insiders with knowledge of the industry said.

Lyft has struggled to provide the contractually obligated minimum number of e-bikes in San Francisco in recent months, prompting these stricter requirements in new rules emailed to the company on August 5, which were obtained by the Examiner.

Lyft pulled its e-bikes off its app when at least four of them caught fire in the Bay Area, two of them in San Francisco. The fires were thought to be related to the bikes’ batteries, prompting a safety concern.

The e-bike industry in San Francisco has undergone other shifts recently that also caused bikes to be missing from the streets.

Previously, The San Francisco Municipal Transportation Agency only outlined requirements around bikeshare generally, not electric motor bikes specifically.

Although Lyft already has launched an e-bike rental service in San Francisco under the name “Bay Wheels,” SFMTA previously tried to open the permit process to other operators, including the Uber-owned service, Jump.

This sparked rebuke from Lyft, who sued The City and asserted they have an exclusive right to bikeshare in San Francisco. Lyft won, but the terms of the San Francisco Superior Court ruling required SFMTA to make a “first offer” to Lyft giving it a chance to provide e-bike rentals, as opposed to traditional bikeshare.

This opportunity allowed SFMTA to write new, stricter rules with tougher requirements for bike availability.

“We are eager to work with SFMTA on growing the regional bikeshare program and look forward to productive conversations with them,” a Lyft spokesperson said in a statement.

Failing to follow these new rules may also result in adverse consequences for Lyft in its battle for e-bike market share against its rival, Uber.

Brian Wiedenmeier, executive director of the San Francisco Bicycle Coalition, told the Examiner the requirements laid out by the letter are strict. Should Lyft fail to meet those requirements, the groundwork may be laid for other operators to move in and operate in San Francisco, he speculated.

“Without knowing the details of the terms offered, this letter certainly contains strong language from SFMTA on what kind of bikeshare they’d like to see in San Francisco,” Widenmeier said. “The San Francisco Bicycle Coalition agrees bikeshare must be safe, equitable, reliable and available.”

The term sheet of Lyft’s new e-bike agreement, penned by SFMTA Acting Director of Transportation Tom Maguire, lays out three tough standards: it requires Lyft’s e-bike fleet to grow, it tasks Lyft with making bikes available in specific neighborhoods, and it specifies fines against Lyft should it fail to do so.

The offer requires “liquidated damages” for non-performance as well as other “enforcement tools” to provide SFMTA with the ability to “hold Lyft to certain performance indicators” to meet the needs of people biking in San Francisco.

“The recent mechanical issues with Lyft e-bikes in San Francisco, which have resulted in two separate suspensions of e-bike service in the past five months, underscore the need for strong service reliability guarantees,” Maguire wrote.

Those bike shortages are Bay Area-wide, and have grown by so much that the Metropolitan Transportation Commission levied $200,000 in penalties against Lyft earlier this month.

Bike availability hit a low of 67 percent in the Bay Area in April, and 60 percent in May and June, according to MTC. Bike availability is not supposed to drop below 90 percent, according to MTC.

In the terms it sent to Lyft, SFMTA laid out quarterly requirements for increasing Lyft’s e-bike fleet, for instance, requiring 3,000 e-bikes on the road in The City by the end of 2019, and 5,000 available e-bikes by mid-2020.

In a similarly strict requirement, service areas for Lyft could not see bike availability drop below 75 percent for 75 percent of any given month. If that term is violated, Lyft would be on the hook for $2,000 for every 1 percent in bike availability that it dips below.

For instance, if a particular service area only has 50 percent coverage over the course of a month, Lyft will be required to pay SFMTA $50,000, the agency wrote.

SFMTA’s terms also try to stop Lyft from leveraging its ride-hailing platform.

All of the company’s e-bikes must be available through the Bay Wheels app, and customers can’t be required to use the Lyft app in order to rent bikes, SFMTA wrote in its term sheet.

The offer to operate e-bikes is roughly two years. In its letter to Lyft, Maguire suggested sitting down to a meeting with Lyft and discussing terms.

Though the two have met in court in recent months, Maguire hoped to take the lawyers out of the equation, perhaps in an effort to strike a more conciliatory tone.

“We would not propose to include legal counsel at the first meeting,” SFMTA wrote.

joe@sfexaminer.com

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