CHICAGO (BRAIN) — Share-bike company Social Bicycles — now known as JUMP and owned by Uber — filed a $75,000 lawsuit against the city of Chicago on Friday, alleging it improperly granted its primary competitor exclusive rights to operate.
According to the lawsuit filed in U.S. District Court, in 2013, the transportation department reached a $65 million contract 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, the suit said.
The suit goes on to state the city “fundamentally restructured the contract governing the bike-share program without engaging a competitive bidding process, in violation of not only public contracting laws, but also basic principles of due process and fundamental fairness.”
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-share arrangement.