Portland’s bike share system is now managed by Lyft while it uses bikes and technology owned by Uber.
On the same day Biketown launches a major service area expansion and host of other changes, Lyft is finalizing a $250 million deal to acquire Motivate, Inc. — the company that operates Portland’s bike share system.
The deal has potentially huge implications for the future of not only bike share in Portland, but the sharing of all types of last-mile solutions including bikes, electric-bikes, and “micro-mobility” vehicles like electric scooters.
It’s also sort of an awkward mess. Here’s why: The bright orange bikes Motivate uses in the Biketown system were designed and made by a company known as Social Bicycles, which was re-launched as Jump Bikes in January. Then in April, Jump was acquired by Uber, Lyft’s main rival. That means Portland’s bike share system is now managed by Lyft while it uses bikes and technology owned by Uber. What could possibly go wrong?
“Motivate is now dependent on Jump, a.k.a. Uber, to provide their service. If they don’t provide the service, they’re on the hook,” William Henderson, a Portland-based mobility software expert and CEO of Ride Report told us in an interview this morning. Henderson was referring to Portland’s bike share contract, which puts the onus for success squarely on the shoulders of the operator.
This might be a problem.
Biketown bikes have specific technology built into them that’s integral to the rest of the system. Even if Uber would sell Lyft/Motivate more bikes (highly unlikely), the new bikes would likely have very different technology and features which would make inter-operability a challenge.
How will Lyft/Motivate keep Biketown running strong if it can’t get any new bikes? Biketown General Manager Dorothy Mitchell told us via email this morning that despite a service area that has expanded from eight square miles in 2016 to about 12 square miles as of today, they are not adding new bikes to the fleet. Instead, they’ll rely on users and staff to rebalance the system. “We’re feeling good about the current fleet being able to meet the need in our service area,” Mitchell shared with us via email this morning.
These inherent contractual limitations only apply to bike share. The contract does not explicitly give Lyft/Motivate an exclusive license for scooters. Because of that, Henderson sees a lot more of them on the local horizon. As we reported last month, Portland is set to launch a pilot program of dockless electric scooters this summer. “Almost certainly what will happen in Portland is that there will be a huge rush of scooters sometime this summer,” Henderson says. “If you look at other cities where scooters have launched, it’s an overnight success. They will run circles around the bikes for utilization rates and trips-per-day.”
Henderson thinks that the popularity of e-scooters will lead to more people clamoring e-bikes. But with Lyft as the operator, it’s hard to say at this point where they’d come from with their rival Uber in control of the supply-chain.
If Motivate’s bikes and tech haven’t kept pace with the dockless wave, why would Lyft spend $250 million for them?
The answer is that what Motivate lacks in technology, they make up for in relationships. It’s very likely Lyft is more interested in using Motivate’s valuable existing contracts and contacts with cities than their clunky bikes and old-school kiosks. Where those contracts are exclusive, like in Portland, all the better to keep a growing list of pesky start-up competitors away.
Meanwhile, Lyft is almost certainly eyeing the bike and scooter-sharing market themselves. GreenBiz.com reported on Tuesday that, “To Uber and Lyft, adding different types of mobility options makes sense as a way to grow their customer base and also offer vehicles that don’t clog urban areas.”
Further evidence of Lyft’s push into this space came via a tweet from industry insider Michal Naka yesterday that showed how the company is hiring a team of “last mile engineers”. Beyond mere speculation, Lyft is reportedly on the verge of launching their own fleet of electric scooters in San Francisco.
Henderson posits Lyft is still 6-12 months away from launching a new bike or scooter product of their own. And even if they were ready today, they’d still have to figure out what to do with the 1,000 bikes and 100 docking stations we have on the streets today — all of which are getting older and more outdated with each passing day.
Stay tuned. This is going to get very interesting.
(The City of Portland/Biketown declined an opportunity to comment on this story.)
— Jonathan Maus: (503) 706-8804, @jonathan_maus on Twitter and firstname.lastname@example.org
Never miss a story. Sign-up for the daily BP Headlines email.
BikePortland needs your support.
If you have questions or feedback about this site or my work, feel free to contact me at @jonathan_maus on Twitter, via email at email@example.com, or phone/text at 503-706-8804. Also, if you read and appreciate this site, please become a supporter.
The scariest thing to me is that this duel of the titans is between two companies that have never made any money ( profit) and have no near term prospects to do so. If we have a recession and the easy money ( venture capital, junk bonds, patient investors) stops flowing both these companies could dry up and blow away in the wind as fast as they came leaving bikeshare high and dry in terms of both equipment and an operator.
Which is exactly what will happen. How quickly we forget the dot.com bubble 20 years ago when everybody was buying and selling everybody else for obscene money. Then came the day of reckoning. Which, according to experts not connected to a political agenda, is about two years out. I have my money on much sooner.
I still have a lot of money in the S&P, but I’m getting increasingly nervous with what seems like an obvious 2nd tech bubble.
Lyft is buying Biketown to shut it down, or to at least damage it in such a way that is no longer competition to their main business.
I doubt that. The damage to their brand would be tremendous. They rely on the good will of public agencies for strategic partnerships that they hope will make their business model profitable (eventually).
In Portland they don’t need city good will to operate, even GreyBall-ing Uber is still freely operating here.
But you’re right that they will seek profits, and that worries me because city bikeshare shouldn’t be about making the most money possible, any more than bus or MAX should be.
Don’t forget that Trimet’s ticket app prompts you to book a Lyft or Car2Go. Never liked that. Feels like surrender.
Maybe, just maybe this move will put more pressure on City Hall to allow other bike shares into the city. Still feels weird to me that they are allowing a monopoly.
Exclusive licenses (government granted monopolies) are not uncomm for a cityon. There’s a monopoly on your electricity, gas, waste pick-up, landline phone option, and cable TV option.
Isn’t it a little strange that the two companies that endanger Portland cyclists every day are the ones buying bike share programs. Uber and Lyft should spend more money educating their drivers on how to drive, how to not double park in bike lanes and anything else related to safe driving. I refuse to use either one!
zipcar was a very functional service that had cars everywhere I needed one. They sold off, got bought out and got rid of most of the cars I used. Soon the service area was shrunk and the options were fewer. Prices went up.
car2go got rid of the smart cars and now only does $20 an hour luxury cars. Reach has always only been about high priced luxury cars. Both of them, if you get somewhere you are in no way guaranteed you can get back from there since when someone else takes the car there may well not be one anywhere close……
So I went out and bought a car. It was cheaper.
How long until they start worrying about which station is the most profitable? Closing many down and having a ridiculous service area filled with upcharges and fees?
At what point will you look it up and find out the nearest bike is 1.2 miles away?
As it stands now, from looking at the data, Biketown is for visitors to ride a bike around the river. Do you think a company like lyft will compete with themselves to change that business model?
Zipcar is still here plus getaround and turo for daily or hourly rentals.
Car2Go and ReachNow still have per minute prices which, I think, are lower than they were when Car2Go switched over.
If buying a car was cheaper than using these services, you were probably using a car pretty regularly (and, of course, you enjoy the subsidy of cheap/free parking and other externalized costs).
Car share is still very viable and strong in this town.
You enjoy externalized costs when using car rentals as well. It’s not like ReachNow pays for the CO2 their vehicles emit, and their users are even less likely to pay for parking than a regular driver.
I do enjoy some of the same externalized costs but I would also assume that the vast majority of car share “dependent” people drive a lot less than people with a private vehicle at their ready disposal.
Your comment about paying for parking is incorrect as the car share services pay parking fees as part of their contract with the city.
How much do you think the companies pay for parking compared to what a private vehicle owner would pay? I suspect they get a hefty discount. Would it be more accurate to say they get a hefty subsidy in the form of discounted parking? I guess this is yet another example of how society subsidizes auto travel, except here, that subsidy is captured by a corporation rather than being returned to individuals. So maybe it’s worse.
You suspect wrong:
“car2go has a permit that allows every car in its fleet (530 vehicles as of October, 2014) to use any unreserved metered and non-metered on-street parking space in the car2go operating area. car2go pays an annual fee for each vehicle that is equal to the estimated lost net meter revenues plus the cost of an area parking permit for every APPP zone in the operating area plus a $50 administrative fee. ”
So, if anything, a person driving a car2go, in aggregate, pays more than a person in their personal vehicle.
That is very interesting. That means that customers not going downtown are subsidizing the parking for those that do. That negates one of the benefits parking fees are supposed to have: discouraging low-value trips, thus improving congestion and ensuring parking availability.
“That is very interesting. That means that customers not going downtown are subsidizing the parking for those that do. That negates one of the benefits parking fees are supposed to have: discouraging low-value trips, thus improving congestion and ensuring parking availability.”
This is getting into pretty silly territory here. Paying per minute inclusive rates for wear-and-tear, parking, and insurance, plus a per ride surcharge is plenty of discouragement for using a car share vehicle for a “low-value” trip. It hardly negates the benefit of downtown parking fees, and it’s arguably a benefit to allow users to drive one-way into or out of the city as the user can take another mode for the second part of that trip.
I don’t think it negates the benefits of parking fees in general, only for car-share drivers, who, you were arguing above, did not benefit as much from externalizing their costs compared to the owner of a private vehicle. I believe that is mistaken.
And Soren’s point is that by focusing on less efficient vehicles, some of the efficiency gains of using a shared vehicle are lost, at least for those who, like me, would buy smaller, more efficient vehicles. For me, driving a shared car that is not a Smart Car only increases my externalized costs, especially if I take advantage of “free parking” downtown (where I am externalizing my parking cost onto other customers, even if not the general public).
And while car share permits some people who might otherwise own a car to not do so (probably reducing the amount they drive), it likewise enables a segment of the population who might not otherwise drive to continue to do so rather than seek alternatives.
Personally, I’m glad we have car share, but I don’t think it does as much as proponents suggest to change transportation culture in the city.
driving a gas-guzzling mercedes or bmw is not sustainable period.
I am no fan of driving, but there are times/places I need/want to go somewhere (particularly with my family that aren’t really reachable by public transportation or other modes.
Are you really so much more extreme than me that you’d rather not see these services available?
Maybe there are other options? Someone could create a car sharing company that used more efficient Smart Cars, for example.
Well, we had that, and it’s completely useless if you want to go somewhere with more than two people. I think this thread is pretty ridiculous. IMO availability and convenience of car share is an integral step in moving “normal” people away from insisting on car dependent policy and development.
All I was trying to do was counter some of the FUD regarding whether car share was still viable or whether it had gotten worse. I’ve been using car share since I sold my car 10 years ago and it’s more convenient and useful than ever.
Granted, I live in a close in neighborhood, I have a clean driving record, I have the income and physical ability to drive a car that I rent. I suspect that billyjo is similar in those demographics.
It is true that a Smart Car won’t work for everyone in every situation. But trying to find the one vehicle that will work for everything is why people who need a Yaris end up with a Ford-150.
Of course, the decision about which vehicles to deploy is probably driven not by end-user utility, but rather by which vehicles they most need to depreciate for financial engineering purposes.
It’s called Car2Go. It’s owned by ReachNow.
Not for long.
“company that used more efficient Smart Cars, for example.”
Efficient measured how?
I think so…
The smart car’s fuel economy is famously not that great. For your statement to be accurate, its fuel economy would have to be >2-1/2 x better than whatever standard (five seat) car we’re comparing it to. Seems unlikely.
Only true if 5 people in a car is anything more than an outlier. I was assuming in-use seatbelts; otherwise I could dramatically up my efficiency by throwing a crate of seatbelts in the trunk.
i would prefer that the city mandate EVs for shared car services.
and from a negative externality perspective (CO2e) it might make more sense for higher-income car-share users to purchase a used or new EV.
PBOT currently collects a 50 cents per ride charge on all TNCs (taxi, Lyft, Uber) but the current rules require the revenue to be spent ($4.4 M in 2017) on TNC-related items. I wonder if Lyft’s acquisition of motivate would open up possibilities to spend some of this TNC revenue on things that can improve bikeshare. Does anyone knowledgable in this area have any idea?
“And even if they were ready today, they’d still have to figure out what to do with the 1,000 bikes and 100 docking stations we have on the streets today — all of which are getting older and more outdated with each passing day.”
Got a kick out of that quote.
I have 5 bikes, the newest of which is 10 years old. Ain’t nuthin’ outdated about any of them 🙂
No, the essential functionality of a bike isn’t outdated, but the docking system and service boundary already ain’t lookin’ so hot, from a consumer perspective.
The “service boundary” has nothing to do with the technology or the bikes.
The only “docking system” requirement is that the bikes be locked to something – bike rack, street sign pole, etc, rather than left in the middle of the sidewalk.
Yeah, my daily commuter was manufactured last century…but we’re talking about bikes with no onboard digital technology. That stuff probably does get outdated and almost certainly has a service life of years, not decades.
If we ever see Limebike and Spin and similar companies sponsoring BP, the editorial/advertising conflict will be apparent.
Your bikes don’t live outside all year, get used/abused by hundreds of people and have an onboard computer. You’re basically comparing a Cessna to a fighter jet.
Embrace. Extend. Extinguish.
Normally, contracts will provide for contingencies such as the prime contractor or a key supplier being acquired. You wouldn’t build your entire program around a sole-sourced product without guarantees that the product will remain available or at least that you’d have an opportunity to acquire more before the product is end-of-life’d.
That’s what I was thinking. Uber acquired Jump’s contractual obligations–they don’t just vanquish. If Motivate didn’t have a contractual means to acquire more bikes, well then wtf, they deserve to be gone.
Agreed (this means Uber is a sub-contractor for Lyft ! ). So they are under contract to deliver, but I’m guessing there is still plenty of a company like Uber to make Lyft miserable without technically breaching the contract. This odd relationship is unique to Portland (in other Motivate cities SoBi/Jump/Uber is not the vendor and in other SoBi cities Motivate is not the operator) so I’m guessing this wasn’t an oversight but things just got swept up in the deal.
I think I picked the wrong day to sign up for a year of Biketown.
Strange times –
Lyft is also trying to kill an EV bill in California (pushing them and Uber to use more zero-emissions vehicles over the next 12 years). (SB 1014)
You’d think instead they’d just lobby to have the bill count bikes toward their zero-emissions goals.
I have no doubt e-scooters will be popular, especially with tourists. Are they really useful for commutes, especially longer distances? How many people will be riding an e-scooter from NE 50th to downtown?
Recall the recent NACTO study of bikeshare said that dockless systems tended to have highest use on weekends and short trips, suggestive of tourist and recreational use, while dock systems had highest use during commute hours, suggesting of daily commuter use.
Portland needs a bikeshare system that works for residents commuting and doing other daily things, so that it can reduce commuting by car. Putting tourists on e-scooters is nice but secondary.
Portland also needs its bikeshare to be run for the benefit of residents, not for the benefit of investors and profits.
Seeing Uber buy Social/Jump and Lyft buy Motivate is worrisome because those companies’ primary interest is their TNC and if they continue to lose huge amounts of money, non-core businesses like Jump and Motivate could potentially suffer. Or, on the more optimistic side, they could bring levels of investment to bikeshare technology that small companies like Motivate and Social maybe couldn’t. So it could be bad or it could be good.
But either way, Biketown itself has to remain a publicly owned and managed system. Unless you want an important part of our transportation infrastructure to be run with the ethics and motivations of, say, Uber.
I’m not sure Portland NEEDS bike rental for daily commuters, most of us happily own our own bikes. Tourist rental seems like a much stronger use case, overall.
We absolutely need shared solutions that solve the “last mile” problem. Not everyone can take a bike on the bus or MAX, and not everyone can ride 20-40 miles per day for a commute. The system is not just used by tourists.
Show me the data. I’m always open to learning who uses these and for what sorts of trips, but the crazy corporate rabbitnholes we keep falling into, and the costs to set up and maintain these systems really strain the imagination of this bike owner.
Yes , Lieutenant Columbo, owning and daily using
one’s own bicycle is best: more convenient; cheaper; ineluctably better riding.
I own and usually ride my own bikes but Biketown is still useful. This afternoon I had to pick up my daughter’s car from the mechanic. Walk to a Biketown bike, ride to the mechanic, lock the bike, pay for the car and drive home. Easy.
When my GF’s car needs anything, my process is similar except I ride my own bike and toss it in the back of the car when I’m taking it to/from the mechanic. More convenient as home and work are both outside Biketown service area. Plus I get to ride a fast bike 🙂
Um… Good for you! I would guess that, like many people including myself, John Liu’s bike/car combo makes it hard to get the bike inside the car.
Upright bike geometry
Lack of QR skewers
I’ve also found Biketown to be useful despite having two bikes of my own and not living in the service territory.
Not long after Biketown was launched, I hosted a friend from out of town for a quick layover. We took a bike ride. Since she’s a LOT shorter than I am, we had to rent and she elected to go with a Biketown bike.
It was, in a word, terrible. Functionality was klunky and fit was uncomfortable.
Needless to say, when friends come to visit, I borrow a bike in advance in their size so we don’t have to use Biketown.
So all this handwringing about Uber and Lyft doesn’t really concern me.
You want decent public transit? Then support it by using it. Trimet won’t pay attention unless ridership goes up, and public transit in this town is still the best deal going — and far better than in many US cities.
How short are we talking? I was amazed that the bikes fit me at 6’5″ (just barely), and seemed to handle just fine. I’ve definitely ridden bikeshare bikes that were significantly worse. I didn’t realize they didn’t work for short people, because it seemed like the seat goes down quite far.
Again, though, bike share is not really designed to replace rentals. They are for short trips, often combined with other transport modes (car, Trimet, walking, etc).
Maybe Motivate/Lyft will freeze the Jump electric bike (made by Geneze) and switch to Lime Scooters or (more ideally) the A2B ebike, made for SwiftMile.
Venture capital has forced out the best idea of all: neighborhood run bike sharing.
Locally operated by bike shops, neighborhoods, or even individuals, a solar-powered charge station had the potential of delivering a cost/effective, locally owned, resilient, post earthquake communications node. It could have benefited everyone and delivered real service. The pieces were all coming together. The VC’s panicked. Now we’re headed down the rabbit hole.
With Lyft buying Biketown operator Motivate for $250 million, here’s what COULD happen:
– Uber will incorporate Jump Bike rentals into their Uber App.
– Lyft/Motivate will stop incorporating Jump electric bikes and switch to Scooters or the A2B ebike, made by Geneze, with a SOBI lock mechanism.
– Getaround and Turo, which rent personal cars, will move to an umbrella hub for both personal cars and bikes.
– Zipcar, Car2Go and ReachNow will team with Portland’s Moovel, for integrated bike/car rental hubs, some of which will use electric cars and bikes.
5 people in a car is definitely an outlier.
I live near Mount Tabor so am crossing my fingers once Jump and Lime bikes come to town like in SF that Portland city officials forces them to have e-bikes all the way out to 82nd or farther east equal side west and east like they did with scooter pilot. #equity