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Uber sues Chicago for exclusive bike-share deal with Lyft

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The lawsuit aims to void the deal approved by the Emanuel administration

A front view of seven blue Divvy bikes with black mesh baskets and dirty tires.
Divvy bikes
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Uber’s bike-share Jump is suing the city of Chicago for a deal with Lyft-owned Divvy that the Emanuel administration pushed through at the end of his term in April. In a federal lawsuit filed on Friday, the company says the city should have called for competitive bids before awarding an exclusive contract that outlawed other bike-share programs.

In March, Lyft announced plans to expand Divvy on the South and West sides with a $50 million investment and new electric-pedal bikes. Uber protested against Lyft and spent thousands on circulating misleading information to end the deal. In response, the Chicago Department of Transportation (CDOT) released a “myths vs. facts” sheet to combat Uber’s talking points.

The deal went through anyway. City Council unanimously approved an exclusive contract with Lyft in former Mayor Rahm Emanuel’s last council meeting.

The lawsuit reads:

“In negotiating a massive and exclusive deal out of public view with JUMP’s principal competitor—which thereby locked JUMP entirely out of a lucrative market without explanation— Defendants unlawfully singled out for the awarding of a public contract JUMP’s competitor with no public-policy justification, and therefore acted arbitrarily, irrationally, wrongfully, and in a way that shocks the conscience.”

Earlier this year, the city piloted Uber’s Jump bikes and Lime bikes. Under the current deal, those companies aren’t allowed to compete in Chicago.

Uber’s intent is to void the contract, so that they could have a chance at securing part of the bike-share market in Chicago. Lightfoot’s administration would still need to review and accept any proposal.

Mayor-elect Lori Lightfoot wasn’t fully on board with the contract that was set by Mayor Rahm Emanuel, according to the Chicago Sun-Times. The newspaper reported she said the deal was, “precisely the style of governance that we have to move away from.”

Originally Uber offered a $450 million dollar investment with a faster timeline than Lyft. However, at the time the city said: “A majority of the money [Uber] did propose represents their own costs to purchase and operate equipment they would own,” and in the deal with Lyft the city would be able to “maintain control and roll out the bikes in an orderly fashion.”

Active Transportation Alliance supported the deal with Lyft, according to Streetsblog Chicago which outlined the differences between the two proposals. One of the major issues with Jump is that it would have privatized the bike-share system and allowed the company to remove bikes at anytime—that’s happened with privately-owned dockless fleets in other cities.

Uber and the mayor’s office did not immediately respond for comment.