Five years ago, when Lyft bought Citi Bike, the ride-share company announced that the acquisition would "revolutionize urban transportation and put bike-share systems across the country on a path toward growth and innovation." But on Monday afternoon, the Wall Street Journal reported that Lyft was looking to ditch its bikes division. What happened?
The issue comes down to Lyft's mission to "revolutionize urban transportation." You would be forgiven for thinking that this means using bike-share systems to reduce car usage, cut carbon emissions, and make it easier for people to navigate their city.
But actually, what Lyft meant was "take more rides in cars." "We haven't done the job we need to do to make sure that every time a person rides the bike, they get welcomed into the Lyft ecosystem, and frankly, welcome into the ride-share side of things," the new Lyft CEO David Risher told shareholders on an earnings call earlier this year.
Citi Bike is "a distraction from the company’s core business," the WSJ story noted. So now Risher is looking to sell it off, or at least find an investor who can prop up the system.
(To give you a glimpse of Risher's leadership style, he has ordered employees back into the office with the promise of "snacks," he asks colleagues to chant slogans at meetings, and he fired 1,000 people his second week on the job. "You want to feel like this team is actually making a difference in the world," he told the WSJ.)
In a weirdly worded blog post, Lyft wrote that "it's only logical for Lyft to listen to credible proposals and explore strategic partners and options in several forms to serve more riders in more cities. We expect this part of the business to continue to be a meaningful part of Lyft’s offering now and into the future."
Citi Bike has changed owners twice in its 10-year history, but the system has never been more popular—its annual ridership rivals Cleveland's entire mass transit system. And it has continued to grow without a dime from the City of New York, which doesn't hesitate to throw hundreds of millions of dollars to the NYC Ferry (daily summertime ridership: 20,000 to Citi Bike's 143,000).
The City also caps the number of e-bikes Lyft can put on the street at 20 percent of the fleet, in order to keep Citi Bike affordable. But the caps and lack of municipal buy-in eat into Lyft's bottom line and make it harder for the bike-share system to provide satisfactory service while also expanding into more neighborhoods to serve more New Yorkers. All of this is why Eric Adams pledged to fund Citi Bike once he took office. Specifically, he promised to "expand Citi Bike well beyond more affluent communities by committing City funding."
When we reached out to City Hall with some questions, the Mayor's Office referred us to the Department of Transportation, which sent us this anodyne statement about the Citi Bike news: "With Citi Bike, New York City and Lyft have built the largest and most successful bike share system in the U.S., and we have reached all-time ridership highs while continuing to expand across the city under the Adams administration. We have been and remain focused on ensuring New Yorkers continue to have access to affordable, convenient bike share."
Citibank, which has paid around $10 million each year of the program's existence for the naming rights, is at least committed to the system—probably because it is very effective and very cheap advertising for a massive bank with lots to atone for. They recently announced a deal to keep their name on the bikes through 2034, in exchange for another $70 million.
Who will step up to save Citi Bike—and stop Lyft's "revolution"?
Here are some more stories to revolutionize your Tuesday:
