The Chicago Sun Times reported yesterday that the Chicago city council’s, transportation committee approved an exclusive partnership between ride share company, Lyft, and bicycle share company Divvy. If approved by the city council, Lyft would be the exclusive owner and operator of all Divvy bikes throughout the city. Despite backlash from incoming mayor, Lori Lightfoot, and a number of aldermen, the deal is being touted by transportation head Rebekah Scheinfeld. Scheinfeld told the press that this agreement would be a huge boon for the city for the following reasons:
1.The city would get $77 million over nine years earmarked exclusively for transportation projects.
2. Lyft would keep all bike-sharing revenues up to $20 million annually, with the city sharing 5% of everything over that.
3. Chicago taxpayers would also receive $1.5 million a year in minimum guaranteed revenue from advertising and promotions.
4. Lyft would be free to raise bike-sharing rates, but only up to 10% per year. Anything above that must be approved by the Chicago Department of Transportation.
5. Assumption of any liability would be Lyft’s responsibility
This last point, “assumption of liability,” is something I am very interested in. If I am reading this correctly, if there any accidents caused by Divvy riders or if the the equipment on a Divvy bike fails, causing a personal injury or traffic accident, then Lyft would be liable. I assume there will be an insurance policy available on a all of these bikes in case of accident (caused by the bicyclist) or failed equipment. If this is true, and this is the agreement between Lyft and the city, then this would shift all of the potential liability costs away from the city and onto Lyft. This would be a big win for Chicago, and also to any potential injury victims.
Uber and Jump, two other ride share companies, have panned the deal as they were not included in any of the planned agreements. Though the introduction of electric scooters is still available.
We will be watching this closely once agreement plan is taken to a vote with the city council as a whole.