- A San Francisco court sided with Lyft last week in a big decision for the company’s bike-sharing service.
- The court ruled that Lyft has an exclusive contract with the city for both docked and dockless bikes.
- When it comes to e-bikes, Lyft also has first-offer for a contract. The city wants there to be multiple operators.
- Wall Street analysts say Lyft’s exclusive contracts with more cities, including New York, could be a big tailwind.
- Visit Business Insider’s homepage for more stories.
Lyft won a major victory in court for its bike rental service last week.
A San Francisco judge on Thursday ruled that Motivate, the bike-share operator that Lyft purchased one year ago, has exclusive rights to rent both docked and dockless bikes in the city.
The preliminary decision in the case, originally filed by Lyft in June when the city first began soliciting dockless bike-rental proposals, also says that Lyft has the “first offer” on electric bikes.
And while the ruling doesn’t necessarily mean Lyft’s newly reintroduced electric bikes will be the only e-bikes in San Francisco, the decision could prove to be a big tailwind for the company.
“This is a major feather in the cap for Lyft as they put more of a fence around their backyard in SF on bike share,” Dan Ives, an analyst at Wedbush Securities, told Business Insider.
“It’s all about the last mile and this ruling was a major step in the right direction for Lyft’s ecosystem to further penetrate this market opportunity. There were worries about the outcome of this and Lyft came away as the winner,” Ives said.
Lyft doesn’t break out individual metrics for its bike and scooters business, but Wall Street analysts believe it could prove beneficial in the long run as the company seeks to grow its total users and trip counts, especially since the company’s contracts in other major cities are similarly exclusive.
“We believe that increasing the number of use cases on Lyft, including through options such as shared rides and bikes & scooters can drive active riders higher,” JPMorgan said in a research note earlier this summer.
A Lyft spokesperson said the company is looking forward to expanding its e-bike program, which also hit the streets in the East Bay, about 12 miles outside of San Francisco, last week.
“We’re pleased that the judge agrees with our position and are eager to move on,” the spokesperson said. “We are, and have been, ready to immediately deploy our new hybrid e-bikes in San Francisco and are waiting for the green light from SFMTA.”
An attorney for the city of San Francisco told Courthouse News that the city is hoping that having multiple operators could help avoid another situation like that which occurred in April, when a brake issue forced Lyft to pull its e-bikes from San Francisco as well as New York.
“We want to make sure the system is not composed entirely of one type of docked bike provided by Lyft,” deputy city attorney Kenneth Walczak told Courthouse News. “We want to make sure residents have access to options.”