California Judge Allows Lyft to Retain Control of Bike Share Market in San Francisco

In 2015, San Francisco signed an exclusivity agreement with Lyft, a ride sharing service that operates a bike rental program. Intended to last 10 years, the agreement resulted in the creation of the Ford GoBike rental program. When San Francisco sought to expand this hourly bike rental program by more than 500 percent, Lyft subsidiary Bay Area Motivate sued San Francisco and its Municipal Transportation Agency. A judge in San Francisco Superior Court ruled that San Francisco must adhere to the exclusivity provisions in the agreement. This makes Lyft the only service that can rent free-floating bikes or bikes attached to a docking station in San Francisco. The judge ruled that the city also must give Lyft priority in offering electric bikes. San Francisco can pursue arrangements with other vendors only if it does not reach an agreement with Lyft after 90 days of good-faith negotiations.

However, the judge also ruled that San Francisco can proceed with a pilot program operated by JUMP, a subsidiary of Uber, while it continues to negotiate with Lyft. This program will place 500 untethered electric bikes on the streets of San Francisco.

Attorneys for San Francisco argued that the exclusivity provisions in the Lyft contract do not cover untethered bikes, while acknowledging that they cover electric and standard bikes that are tethered. They cited the importance of stimulating competition and providing alternatives to residents of San Francisco in case Lyft bikes malfunction. (A malfunction occurred earlier this year.) The judge acknowledged this concern but ruled that the malfunction did not release the city from its obligations under the contract. The city does not plan to contest the decision.