CHICAGO (BRAIN) — The Chicago Department of Transportation asked the U.S. District Court on Thursday to dismiss a share-bike company’s lawsuit that alleges the city granted its primary competitor exclusive rights to operate.
Social Bicycles — now known as JUMP and owned by Uber — filed the $75,000 lawsuit against the city in August. The city agreed to a $65 million contract in 2013 with Alta Bicycle Share Inc., which later was acquired by Motivate.
In March 2019, the city renegotiated the contract without engaging in competitive bidding or requesting a proposal from JUMP, as required by state and local public contracting laws, according to the suit.
In asking the court to dismiss, the city said it did not have to engage in a competitive bidding process procedures required by the Illinois Municipal Purchasing Act (MPA). The city said MPA’s bidding requirements do not apply to these types of contracts.
“Finally, the contracts raise no substantive due process issue,” the dismissal motion said. “Plaintiff therefore fails to state a claim, and the court should dismiss the complaint.”
In 2007, Chicago began planning to bring bike-sharing to the city and started searching for private-company proposals to run the program but abandoned the plan because of cost.
The idea was rekindled in 2011 when the city received a $18 million grant from the Federal Highway Administration that led to the eventual deal with Alta Bicycle to exclusively operate in Chicago.
Lyft acquired Motivate in 2018 and re-approached the city seeking to expand the bike-sharing arrangement.