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San Francisco Considers Settling $330,000 Lawsuit with Lyft’s Bikeshare Subsidiary

Published on Dec 4, 2020 at 9:39 am in Rideshare Lawsuits.

In June 2019, Bay Area Motivate, owned by Lyft, filed a lawsuit against the San Francisco Municipal Transportation Authority. The lawsuit claimed the transit agency had breached its contract by soliciting applications for dockless e-bike permits.

The lawsuit was initiated after the Transportation Authority decided to solicit applications for stationless e-bike permits in May 2019. Lyft believed the call for applications ignored the company’s understanding of its right of the first offer for any kind of electric bike program expansion written into the ten-year contract it signed with San Francisco in 2015.

Now, San Francisco has tentatively agreed to pay $330,000 to settle the lawsuit. According to John Cote, a spokesperson for the City Attorney’s Office, the proposed settlement could help San Francisco’s mobility network moving forward, by providing it with more flexibility and influence over building out a bike-share system.

If the settlement is approved, it would end the 18-month long legal battle over whether Lyft should have a monopoly over San Francisco’s electric bike market. Previously, the San Francisco Municipal Transportation Authority argued that its contract with Bay Area Motivate guaranteed exclusivity only on the operation of an e-bike station program. It didn’t prohibit the agency from seeking business for other e-bike options, like those that are dockless.

The presiding judge, Judge Ethan P. Schulman, however, disagreed. He sided with Lyft, and San Francisco was hit with an injunction to stop soliciting new dockless e-bike permits until the lawsuit was resolved. The judge did allow the JUMP pilot to continue and later be extended.

The settlement would resolve Lyft’s claim, as well as waive the $50,000 in fees for Lyft. The money would come from a line item in the San Francisco Municipal Transportation Authority’s operation budget designated for judgments and claims that could arise during any given fiscal year.

Since the start of the COVID-19 pandemic, the micro-mobility option provided by Bay Wheels has helped fill the gaps left behind by the cuts to the city’s services. In April, Lyft expanded its service to the Richmond and Sunset Districts, as well as the area’s southern neighborhoods. It is also planning on extending its reach to e-bike-barren neighborhoods—with 54 potential new stations.

In response to the settlement, Lyft spokesperson Julie Wood released the following statement: “We’re pleased that we’ve reached an agreement with SFMTA and look forward to continuing our partnership with The City.”