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Uber sues Chicago over ‘backroom monopoly’ given to Lyft in bike-share deal

Uber alleges the city unlawfully gave an exclusive contract to Divvy’s operator after renegotiating the deal in April.

Police say between 12 and 15 people on Divvy bikes were involved in a carjacking July 26, 2020, in the 200 block of East Grand Avenue.
Divvy, an operation of the Lyft-owned Motivate, is at the center of contention between the two competing companies.
Ashlee Rezin/Sun-Times

The battle over the city’s bike-share program escalated Friday with Uber suing the city for allegedly providing Lyft, its chief competitor in the ride-share business, “a backroom monopoly” over Divvy services.

Uber’s lawsuit, filed in federal court Friday, alleges that the city’s Divvy contract, as it stands now, gives Lyft — which owns the operator of the contract, Motivate — a “new and sweeping exclusive right ... that would lock out all of [its] competitors.” Uber owns Jump, a dockless bike-share company seeking to do business in Chicago.

The contract between the city and Motivate was amended in April — just as Rahm Emanuel’s term as mayor was ending — to expand Divvy throughout the city, thereby giving Lyft exclusive ownership of the city’s bike-sharing services, the suit says.

“The amendment categorically transforms what in essence was a discrete operational deal for a traditional docked bike rental program into a sprawling and exclusive arrangement that granted one company a monopoly over the offering of increasingly valuable bike-share services on city streets,” the complaint states.

The suit claims it was granted in violation of public contracting laws.

Uber spokeswoman Kelley Quinn calls the amendment a “backroom monopoly [that] fails to bring bikes to all Chicago neighborhoods ... where they are needed most.”

Uber’s lawsuit aims to nullify the city’s bike-share agreement. The company claimed it could provide more dockless bikes than arranged under the contract and serve the entire city, not just neighborhoods with docking stations for the bikes.

The modified agreement, which the suit says was hastily approved by the City Council, was met with some community backlash after its announcement in April.

City officials could not be reached for comment Friday. A representative of Lyft also could not be reached.

The Sun-Times reported in April that South and West side community leaders said it perpetuated inequity in their neighborhoods because it provided for fewer bikes than other areas.

The suit also seeks legal fees and other relief the court deems proper.