Here’s Some of the Nitty-Gritty From the Proposed Divvy/Lyft Contract Amendment

The new electric-assist Divvy bikes (shown here without Divvy and Lyft branding) will have a built-in cable lock, allowing them to be parked at bike racks.
The new electric-assist Divvy bikes (shown here without Divvy and Lyft branding) will have a built-in cable lock, allowing them to be parked at bike racks.

The contract amendment between the city of Chicago and Lyft that City Council may potentially approve at its April 10 meeting has some interesting details that haven’t gotten much, if any, play in the media. To bring you up to speed before I jump into the contract details: The deal would require Lyft to drastically expand the Divvy bike-share system into all 50 wards, give the city a cash payment every year, and deploy electric-assist bikes. Check out the contract amendment document here.

What you may not have heard is the following, taken straight from the contract:

  • Divvy must have a summer youth jobs program and include ex-offenders. The contract doesn’t specify a deadline, or stipulate other requirements. The youth jobs program sounds similar to the one that Assistant Commissioner Sean Wiedel ran under the Department of Environment, which was then transferred to CDOT when Mayor Emanuel closed that department.
  • Divvy must study adaptive bikes and run an adaptive bike program. The bikes do not have to be Divvy-branded bikes, nor do they have to be available at docking stations. The city must approve the program.
  • There’s a phased implementation, so even though citywide expansion wouldn’t need to be completed until 2021, portions of the build-out have to be complete within 12 months (3,500 new bikes and 50 new stations), 24 months (3,500 new bikes and 125 new stations), and 36 months (3,500 new bikes).
  • Fifteen percent of stations have to be electrified stations by 6/30/21 to charge the e-bikes. This 15 percent group can include existing city-owned stations and new stations. (That doesn’t seem like enough stations to be able to charge thousands of bikes a day.)
  • The contract requires the installation of “bicycle hubs”, which are basically bike parking areas without docks, according to the limited text in the contract.
  • Lyft can get third-party sponsors to supplement their own revenue and expenses, and for a period of 90 days, must offer Blue Cross Blue Shield right of first refusal to be a third-party sponsor.
  • Twenty percent of the static ad panel faces and digital ad impressions can be used to advertise Lyft and its products. Five percent of the static ad panel faces and digital ad impressions are for the city to use for public service announcements. Additionally, some ad space that Lyft is unable to sell within a given period can be used to display Lyft branding and artwork selected by Lyft, but 25 percent of that unsold space must be given to the City for PSAs.
  • If Lyft wants to change the name of the system from Divvy to something else, Chicago has the right to reject the proposed name for any reason.
  • Lyft must work with the CTA to make it possible to use the Ventra to unlock bikes by 12/31/19.
  • In another joint venture with CTA, Lyft must offer an integrated transit-bike fare medium, such as a fare card, by 6/1/21.
  • Every year Lyft would pay the City $6 million, which increases four percent annually. In addition, the city would get forty percent of ad and sponsorship revenue, minus certain expenses, at a minimum of $1.5 million a year. The city also gets five percent of a year’s ridership revenue if it exceeds $20 million.

One last thing: to improve transparency, every contract the city signs includes an economic disclosure statement that must be filled out by owners of the private entity on the other side of the contract. Divvy is run by Motivate International, Inc., which is owned by Bicycle Holdings, LLC, which is owned by Lyft, Inc., 10 percent of which is owned by Rakuten, a Japanese internet services company.

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  • Austin Busch

    the Chicago Transit Authority, Lyft and the CTA

    Are the CTA and Chicago Transit Authority separate entities?

  • Tooscrapps

    Maybe he means CDOT, as they run the bike program.

  • johnaustingreenfield

    Nope, the first joint venture with the CTA is making it possible to unlock bikes with the Ventra; the second joint venture with the CTA is rolling out a combined CTA/Divvy fare medium, such as a fare card. I’ve tweaked the language to make that more clear.

  • Austin Busch

    I see, it’s the pesky comma clauses that tripped me up!

  • TF

    “City approval will be required for all new fare products, new fare policies and fees,
    including introducing additional surcharges for premium services such as E-Bikes.” This hopefully means e-bikes would be included in the annual membership, unlike in NYC with Citibike. I can’t imagine why the city would ever approve a surcharge like that.

  • GranWagon

    I didn’t see any mention of geo-fencing for the dockless bikes. I’m wondering what happens if you ride a dockless bike into, say, Evanston? They are served by Divvy but not included in the terms of the new contract.

  • As long as we are discussing Ventra, Divvy and the CTA, could we not also reintroduce our desires for a monthly cap on transit expenses? In this case including and over various transit modes?

    There should also be some kind of clause that any new technology not anticipated by this contract will require renegotiation. Or some such. I’m not a lawyer, but hopefully the idea is sufficiently self explanatory that a lawyer could devise appropriate language with real teeth.

  • ChicagoCyclist

    Yes. Will the new bikes be “dockless” (no charge for being left/locked at any rack or pole) or “hybrid” (can be temporarily locked at any rack or pole, but ‘official ride’ / checkout of bike must end at a designated docking station or location?