Lyft Hit With $200,000 Penalty for Shortage of Shared Bikes

A Lyft/Bay Wheels bike station on Howard Street in downtown San Francisco, August 2019.  (Dan Brekke/KQED)

The Metropolitan Transportation Commission is hitting Lyft with a penalty of nearly $200,000 for failing to keep an agreed-upon number of bicycles on the streets as part of its Bay Wheels bike-share program.

The penalty is mostly the result of Lyft's decision in April to take electric-assist bikes out of service following reports of braking problems. The company made a similar move last week, when it withdrew a brand-new fleet of e-bikes after battery packs on four of the cycles caught fire.

Removing the bikes this spring meant the company was unable to deliver on its contractual obligation to provide a minimum number of bikes for riders in the five cities served by Bay Wheels, formerly called Ford GoBike: San Francisco, San Jose, Oakland, Berkeley and Emeryville.

In San Francisco, for instance, Lyft is obligated under a series of key performance indicators to continually provide about 1,800 bikes for shared use -- 90 percent of its total city fleet of 2,000 or so two-wheelers.

To guarantee flexibility for riders, Lyft is also required under its MTC contract to ensure that both bicycles and dock space remain available throughout the bike-share network from 6 a.m. to 10 p.m. every day

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When the braking issue emerged in April, Lyft removed about 1,000 e-bikes from service in San Francisco, cutting its fleet in the city by nearly half. The widely remarked upon result: a dramatic increase in the number of empty bike docking stations around the city.

The MTC says that for the three months between April 1 and June 30, bicycle availability in the Lyft/Bay Wheels network fell to 60 percent -- far below the 90 percent requirement. The agency also recorded 2,632 instances, or about 30 a day on average, when Lyft violated the requirement to have bikes or docking space available in each cluster of stations throughout its service area.

Under its contract with the MTC, Lyft is liable for damages when it misses those targets or others, including ensuring that docking stations remain free from graffiti and responding promptly to phone and email queries.

The MTC says Lyft's penalty for missing the bike availability targets totals $195,540. Violations of other key performance indicators -- including $9,600 for 128 instances in which the company didn't clean or remove litter from its docking stations as required -- brought the total damages for the April-June quarter to $209,106.

In a statement Tuesday, Lyft acknowledged the penalty and said the violations grew out of a concern for customers who might have been endangered by its bikes' braking problems.

"Putting rider safety first has reduced our bike availability, and we'll certainly have to pay penalties for it — but we know it was the right thing to do," the statement said.

The MTC's calculations aside, it's nearly certain that Lyft will pay just a fraction of the assessed damages. That's because the penalty is capped at 4% of Bay Wheels membership revenue.

In 2018, the MTC assessed $356,732 in damages against the bike-share network, mostly for violations involving station cleaning, graffiti removal and bike availability.

But with the 4% revenue cap in place, the amount actually paid was $122,839, or a little less than one-third of the total penalty amount.

The MTC distributed the fines to the five bike-share cities based on the number of violations that occurred in each. Oakland received $54,807, followed by San Francisco with $32,921; San Jose with $27,857; Berkeley, $6,339; and Emeryville, $915.

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