Lyft expands its bike-sharing footprint in Chicago:
Divvy to get $50 million upgrade from Lyft investment in exchange for ride revenue under contract proposal
Madeline Buckley
Chicago Tribune
March 13, 2019
Divvy bicycles in the 100 block of North Michigan Avenue in 2018. (John J. Kim/Chicago Tribune)
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Lyft would pour $50 million into the Divvy bike share program — more than doubling the number of available bikes and putting docking stations in every ward in the city — under a 9-year contract proposed as an amendment to the ride-share company’s city contract.
The proposal would require Lyft, which took over Divvy’s operation last year, to add 175 stations and 10,500 bikes, Mayor Rahm Emanuel and Chicago Department of Transportation Commissioner Rebekah Scheinfeld announced Tuesday.
Lyft also must install Divvy stations in all 50 wards by 2021, an expansion that has been requested by aldermen in the Far South and Southwest sides, where the bike share has not yet reached. Officials did not yet have details about exactly where the 175 new stations would go.
“The truth is, we don’t have the resources if we did it on our own to get it to every nook and cranny of the city,” Emanuel told reporters.
Lyft, a San Francisco-based ride share company, bought Motivate International Inc., which operated bike shares in cities such as Chicago, New York and Boston, last year.
Under the proposed contract, which requires City Council approval, Lyft would add electric pedal bikes that can lock in both Divvy docks and regular bike racks. The new system would have a total of 800 stations with 16,500 bikes.
In addition to the $50 million investment, Lyft would be required to make annual payments to the city, starting at $6 million and increasing by 4 percent each year. The city would share in at least $1.5 million in revenue generated from advertisements and sponsorships, or 40 percent of the total revenue if such revenue exceeds $1.5 million. The city’s share would have to be used for transportation, Emanuel said.
After making its payment to the city, Lyft would keep revenue from Divvy up to $20 million. The city would get 5 percent of any revenue over $20 million, Emanuel said.
Lyft also retains exclusive rights to operate a bike share program in the city.
Right now, the program brings in about $9 million, but is operating at a loss of about $600,00 to $700,000, officials said. There were about 3.6 million Divvy rides last year.
“We would eliminate that loss plus get the upside of the cash,” Emanuel said.
mabuckley@chicagotribune.com
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