It’s official: San Francisco won’t be granting any new bikeshare permits until its legal tussle with Lyft concludes.
Lyft, which operates the bikeshare outfit Bay Wheels, formerly known as Ford GoBike, sought a temporary restraining order against the San Francisco Municipal Transportation Agency last Friday, seeking to block it from entering into new bikeshare agreements.
That was the opening engagement in Lyft’s lawsuit with SFMTA, which also was filed June 7, and ultimately will see the ride-hail entity defend its exclusivity contract to operate bikeshare in San Francisco.
Wednesday, however, the first tussle came to a muddled conclusion.
San Francisco Superior Court Judge Ethan Schulman declined to rule on Lyft’s request for a temporary restraining order. But that’s far from a loss, as SFMTA agreed in a stipulation not to grant any bikeshare permits until five days after the judge issues an order in the suit, which may come as soon as the next hearing on July 11.
Each side presented the outcome as a win.
“We are pleased that the court rejected Lyft’s request for a restraining order, which was based on Lyft’s argument that it is entitled to a sham process where only one permit is issued—to Lyft. The court preserved the status quo,” said City Attorney’s Office spokesperson John Cote in a statement. “The SFMTA can accept permit applications until the June 24 deadline.”
A Lyft spokesperson told the San Francisco Examiner, “We’re pleased to be moving closer to resolving this dispute and are eager to continue investing in the regional bikeshare system.”
Lyft’s court filings show it sought to block new bikeshare permits from being issued as well as to prevent SFMTA from “taking any other measures that would dilute, disregard or otherwise prejudice (Lyft’s) exclusive right to operate a bike share program” in San Francisco.
The legal battle launched when SFMTA publicly declared it would solicit new bikeshare permit applications in late May. A slew of multi-billion dollar tech companies are vying for these increasingly valuable permits to operate in cities across the United States. E-bikes, e-scooters, even pogo sticks, are available to rent by smartphone app in the burgeoning industry.
But in 2015, a bikeshare company called Motivate entered into an exclusivity contract with myriad Bay Area cities. The deal would see Motivate invest millions into building out bikeshare docks and other infrastructure, with the company expecting to recoup those costs thanks to guaranteed monopolies. Lyft bought Motivate last year, including its contracts with cities across the country.
Those agreements were threatened when “dockless” bikeshare, meaning bikes that could be rented and parked anywhere, began proliferating. Lyft threatened SFMTA with a lawsuit when the agency sought new dockless bikeshare permittees.
In seeking to court Lyft’s competitors, SFMTA argued that Lyft’s exclusivity agreement only pertains to docked bikeshare, whereas Lyft argues the agreement precludes any type of bikeshare from threatening its exclusivity contract, docked or not.
This story has been updated to reflect the specific ruling of the San Francisco Superior Court.