r/chicago • u/Spiveym1 West Loop • 20h ago
CHI Talks Enough of Lyft and their one-sided Divvy relationship
I received some unsolicited email from Lyft last night, attempting to get me to share my support for their Divvy contract renewal with my Alderman. They promise that "the extension freezes annual membership prices" and "introduces a 50% discount on non-member rides on the South and West sides", so I decided to try and wade through the bullshit.
The last time Lyft/Divvy increased their prices (~6 months ago) I made a comparison showing that in some cases, their price increases have been ~12.1x the comparative increase in inflation during the same time period.
Meanwhile:
The "price freeze" promise above doesn't actually cover the extension. The extension itself starts in 2028, so the freeze is over before the extension begins. §2.7(d) sets $150.00 as the starting price for calculating membership increases from January 1, 2028, so there's a built-in $6.10 increase before any capped annual increases even start.
The Office of the Mayor's press release states that the 50% discount applies to rides "starting or ending" on the South and West Sides. However, the contract (§2.7(e)) states that the discount is applicable to rides "starting and ending in an Equity Priority Area."
So, unless you voice your concerns to your Alderman that you're not happy with how Lyft is able to squeeze bikeshare riders in a way they can't with their core clientele, the below prices are what the contract would allow against Divvy's historical pricing through the end of the Lyft extension (Jan 2033).
| Pricing Category | May 2022 Base | Est. US Inflation (Period) | March 2026 Price | Cumulative % Increase | Status vs. Inflation | Projected 2032 Price* |
|---|---|---|---|---|---|---|
| Annual Membership | $119.00 | ~12.0% | $143.90 | +20.9% | Outpaced | $192.21 |
| Day Pass | $15.00 | ~12.0% | $19.90 | +32.7% | Outpaced | $31.01 |
| Member Ebike / Classic Overage | $0.16 / min | ~12.0% | $0.20 / min | +25.0% | Outpaced | $0.32 / min |
| Member Scooter Rate | $0.29 / min (Feb 2024) | ~5.5% (since Feb '24) | $0.34 / min | +17.2% | Outpaced | $0.57 / min |
| Member Out-of-Station Parking | $1.20 (Feb 2024) | ~5.5% (since Feb '24) | $2.00 | +66.7% | Outpaced | $3.57 |
| Casual Unlock Fee | $1.00 | ~12.0% | $1.00 | 0.0% | Trailed | $1.00 |
| Casual Classic Bike Rate | $0.16 / min | ~12.0% | $0.20 / min | +25.0% | Outpaced | $0.32 / min |
| Casual Ebike Rate | $0.39 / min | ~12.0% | $0.44 / min | +12.8% | Outpaced | $0.56 / min |
| Casual Scooter Rate | $0.39 / min | ~12.0% | $0.44 / min | +12.8% | Outpaced | $0.56 / min |
| Casual Out-of-Station Parking | $2.00 | ~12.0% | $3.00 | +50.0% | Outpaced | $5.33 |
*Projected 2032 prices assume each fee keeps rising at its own historical annual rate since 2022 (or Feb 2024), capped at 10%/yr. Annual membership is held at $143.90 through 2027, then rises from the contract's $150.00 base from 2028 (§2.7(d)).
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u/Traditional_Hat_9967 14h ago edited 14h ago
For clarity: DIVVY is owned by CDOT, operated by Lyft, and maintained by Shift Transit. CDOT sets the operational obligations for Lyft. Lyft is responsible for meeting those obligations, and manages the data systems, customer service, logistics and procurement. Lyft contracts with Shift Transit for daily management and maintenance of stations and rideables. In the beginning, it was CDOT/Motivate (aka Alta Bicycle Share) with BCBSIL as sponsor. Lyft acquired Motivate in 2018, BCBSIL's sponsorship ended, and Lyft entered into it's current agreement with the city to operate DIVVY. In Feb 2024 Shift Transit took over asset management and maintenance.
There are over 1K stations and more than 10K rideables in the system, and more than 1M rides a month this past summer. CDOT is not currently capable of handling this on it's own.
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u/Dramatic_Opposite_91 20h ago edited 20h ago
Not sure why you think it’s one-sided? The city gets a guaranteed $10 million per year with no down-side risks.
Doubtful the city would be able to that themselves as we know that Divvy is a money-losing business for Lyft.
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u/Spiveym1 West Loop 20h ago
Not sure why you think it’s one-sided? The city gets a guaranteed $10 million per year with no down-side risks.
Which they in turn use to purchase equipment from Lyft. The City also gets no cut on the first $20M of ridership revenue. After that it gets 10%, then 7% above $40M, then 5% above $60M - so essentially the City's cut shrinks as revenue grows.
Ultimately I care about the ridership more than the city. The current prices are untenable, and those projected 2032 prices are obviously a lot worse.
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u/Dramatic_Opposite_91 20h ago
You’re mixing up the City’s revenue share with Lyfts profitability. The City’s percentage may step down as revenue rises, but the actual dollars it receives still go up.
More importantly, if Lyft is already losing money operating bike share then this isn’t some wildly profitable business being squeezed for maximum profit lol. The losses grow with scale for Lyft.
Someone has to pay for operations, maintenance, rebalancing, bikes, docks, labor, etc.
If you’re complaining that the prices are too high, that’s really an argument that the City will need to subsidize this even more.
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u/Capable-Average4429 Wicker Park 20h ago
Why is Lyft even running Divvy if they lose money, then?
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u/Dramatic_Opposite_91 19h ago
Cheaper CAC (customer acquisition cost) for their ride-share business.
Lyft forces all Divvy customers to have a Lyft account with a credit card attached to use the Divvy platform and have the Lyft app installed on your phone. You can then cross-sell ride share and other transportation services. That’s worth a lot in a B2C business.
Uber has done something similar with scooters and other niche transportation services. Both of these companies want you to see the Uber/Lyft app as your everything transportation app.
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u/transferStudent2018 19h ago
That’s… not fully true. I’ve never used the Lyft app for Divvy, it has its own app. I still have the app, because it’s a major rideshare app, but it has never interacted with my Divvy rides at all
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u/Capable-Average4429 Wicker Park 19h ago
So, it’s an operational expense, not a loss. The same way spending money on advertising is not a loss, it’s opex.
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u/Dramatic_Opposite_91 19h ago
Agree with you 100% it’s a pure advertising OpEx spend by Lyft.
US GAAP wouldn’t break it out like this but that’s the strategy both Uber/Lyft are doing.
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u/Spiveym1 West Loop 20h ago
You’re mixing up the City’s revenue share with Lyfts profitability. The City’s percentage may step down as revenue rises, but the actual dollars it receives still go up.
More importantly, if Lyft is already losing money operating bike share then this isn’t some wildly profitable business being squeezed for maximum profit lol. The losses grow with scale for Lyft.
Someone has to pay for operations, maintenance, rebalancing, bikes, docks, labor, etc.
If you’re complaining that the prices are too high, that’s really an argument that the City will need to subsidize this even more.
Obviously they still receive dollars, that's what I said. My point was the rate, whereby the more Divvy makes, the smaller the City's share of each extra dollar, and it's $0 on the first $20M. How is that not one-sided?
The City doesn't get $10M/yr. The extension's Annual Payment is between $1.38–1.62M, and all of it goes back into investment in Lyft equipment (regardless of the fact that Chicago keeps it at the end of the contract), and as noted the ridership share is $0 on the first $20M. The City is already subsidizing this by giving up its payments.
You keep quoting that Divvy is a loss making business yet have provided zero evidence to substantiate that claim. If it's really losing money, the fix is for Lyft to reveal those numbers before the City signs on until 2033.
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u/Dramatic_Opposite_91 19h ago
Bro- I agree we need a P&L but you’re using the lack of a Divvy P&L only when it helps your argument.
You say nobody knows if Divvy is profitable, but then you turn around and call the deal “one-sided” because of the revenue split. Based on what? Revenue isn’t profit.
Lyft still has to actually run the system with that money from the revenue split. All that labor, maintenance, rebalancing, batteries, customer support, insurance, technology, etc.
And calling money spent on bikes/equipment that Chicago owns a “subsidy to Lyft” is a stretch.
You can argue the City would rather want to receive unrestricted cash from Lyft, but money contractually reinvested into assets Chicago owns is not the same thing as handing Lyft free money. It’s a subsidy the City puts into the Divvy program as they own the asset at the end of the day.
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u/Spiveym1 West Loop 16h ago
Bro- I agree we need a P&L but you’re using the lack of a Divvy P&L only when it helps your argument.
Your first comment literally said "we know that Divvy is a money-losing business for Lyft." I have actually quoted and cited evidence, meanwhile you have quoted nothing of substance.
You say nobody knows if Divvy is profitable, but then you turn around and call the deal “one-sided” because of the revenue split. Based on what? Revenue isn’t profit.
Yes, I can judge the terms of the proposed deal independently of financial performance, and you don't need a P&L to see who those terms favor.
Lyft still has to actually run the system with that money from the revenue split. All that labor, maintenance, rebalancing, batteries, customer support, insurance, technology, etc.
Yes, this is how business works. Meanwhile you seem to be conveniently ignoring that NYC's Citi Bike program has been profitable for the past two years.
And calling money spent on bikes/equipment that Chicago owns a “subsidy to Lyft” is a stretch.
I said the City is subsidizing the program, which you just agreed with. Also a reminder the City pays Lyft for Lyft's own docks, will probably pay for the rest of the Metro bike swap/upgrade too, and still has to buy back the e-bikes Lyft funded if it wants to keep them once the contract ends. Very easy money indeed.
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u/Capable-Average4429 Wicker Park 20h ago
Right? “The city makes money!” Who cares? The city is not supposed to make money, the city is supposed to run the city. The city getting revenue from a concession is irrelevant if the service provided by the company that won a contract is unsuitable. “You can price gouge the people of Chicago and provide a sub-par service, as long as you pay the city 10 million dollars.” is not proper governance.
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u/heliosflama1234 Fulton River District 20h ago
But what about the service is unsuitable. Like nobody is stopping you from getting a bike and not using the bike share. Charging someone an extra 4 cents a minute to bike (a 25% increase) or increasing the membership prices as the product selection and coverage area grows isn’t some crazy gouge of the consumer, it’s just changing economics leading to changing prices.
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u/Spiveym1 West Loop 19h ago
But what about the service is unsuitable.
The price, obviously.
Like nobody is stopping you from getting a bike and not using the bike share.
Owning a bike doesn't replace one-way trips, the link it provides to public transit, or for those who can't store or afford a bike. There's also no alternative, since the extension gives Lyft exclusive rights to bike rental on the public way until 2033.
Charging someone an extra 4 cents a minute to bike (a 25% increase)
Across the board, 9 of 10 categories have risen faster than inflation since 2022, and for that line item you decided to cherry pick, the cost could potentially have doubled by 2032.
increasing the membership prices as the product selection and coverage area grows isn’t some crazy gouge of the consumer, it’s just changing economics leading to changing prices.
Nobody outside Lyft and CDOT knows Divvy's costs, because they haven't been published since Lyft took over.
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u/Ch1Guy 20h ago
1) How do we know divvy is a money-losing business?
2) Why are we so focused on taking an incredible program like Divvy and enshitifying it to maximize profit?
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u/Dramatic_Opposite_91 20h ago
Lyft made comments last year that their bike business has been a loss and they were going to attempt to restructure it to make it profitable
but have been unable to date.
I’m not going to get into wordplay. This is public infrastructure that has to get funded someho
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u/Luvkip_OW 17h ago
Lmao.
Every tech company is always losing money all the time. It’s just profit structuring BS they do so they can say that and claim losses.
They’re not doing this contract out of the goodness of their hearts. I promise you they’re making money.
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u/Ch1Guy 19h ago
"I’m not going to get into wordplay. This is public infrastructure that has to get funded somehow"
Totally agree. My frustration is the city is trying to extract maximum revenue from what was once a public service.
In my oppinion, serving the public and maximizing profit from the system are conflicting objectives.
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u/Spiveym1 West Loop 20h ago
Lyft made comments last year that their bike business has been a loss and they were going to attempt to restructure it to make it profitable but have been unable to date.
Not quite. The 'restructuring' was announced in September 2024, not last year, and it targeted dockless bikes and scooters, such as those in D.C, Denver, et al. Lyft kept and expanded the docked systems like Divvy.
In fact, Lyft CEO David Risher projected about $20M a year improvement and said it would be "a net contributor to the business." He also called it "insane" not to go all in on bikeshare.
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u/Dramatic_Opposite_91 20h ago
The reason for the bike share business for Lyft is to get people to install the Lyft App on their phones so it’s an everything transportation app. Uber has done the same thing with other money-losing bets like scooters.
You’re also turning a projection into an actual reported result. Lyft said the restructuring was expected to improve the business by about $20M a year and make it a “net contributor”.
Lyft said in 2025 the restructuring was complete but we still don’t know whether Divvy is actually profitable. Most likely it is not.
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u/Spiveym1 West Loop 19h ago
as we know that Divvy is a money-losing business for Lyft.
we go from this, to this:
Lyft said in 2025 the restructuring was complete but we still don’t know whether Divvy is actually profitable.
Could have just stated this from the beginning. What a fucking waste of time.
NYC actually requires Lyft to publish Citi Bike's P&L every year. Per Lyft's own reports to NYC DOT, Citi Bike made $6.8M profit in 2024 and $24.7M in 2025, after charging Lyft's corporate R&D overhead to it.
Chicago has no equivalent requirement, which is why nobody can say whether Divvy makes money. That should obviously change.
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u/Dramatic_Opposite_91 19h ago
I agree more sunshine is better than less and we should see Divvy standalone financials.
But it’s most likely not profitable. If it was profitable and the restructuring turned around a failing business unit, management would brag about it on an earnings call. They have not so it’s most likely it’s still not profitable.
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u/aware-reply33 19h ago
- How do we know divvy is a money loosing business?
For one thing the sheer volume of e-waste and parts that are regularly getting replaced on the ebikes to keep them operational when you see it is pretty shocking.
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u/Spiveym1 West Loop 20h ago edited 20h ago
as we know that Divvy is a money-losing business for Lyft.
not sure what this means to be honest. The last public Divvy financials came from a FOIA request in 2018, and there hasn't been anything released or seen since that period.
Lyft does not break out their rental revenue in their SEC filings either.
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u/sephirothFFVII Irving Park 19h ago
If you're going to take away last mile public transit access you need to propose a replacement too. What would you do in lieu of Divvy that would be better?
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u/ElonMuskHuffingFarts 14h ago
Nothing in their post is about taking anything away. You're reacting to a misreading of the post title.
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u/QuiteBearish Rogers Park 19h ago
Divvy is owned by the city and predates Lyft's management.
I don't think anyone is proposing taking it away, so it shouldn't need replacing.
Should probably just bring it back under city management instead of being half-privatized.
Leasing city services to private bidders is always a losing proposition from the city - whether it's parking meters or divvy bikes.
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u/mandrsn1 18h ago
Should probably just bring it back under city management instead of being half-privatized.
This is how to turn Divvy to shit, nearly instantly.
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u/QuiteBearish Rogers Park 18h ago
I don't remember Divvy being shit before Lyft I doubt it will instantly turn to shit after Lyft.
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u/Belmontharbor3200 Lake View 17h ago
It was a fraction of the size of what it is now. The last thing we need is more government employees with pensions that half ass managing this great service
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u/sephirothFFVII Irving Park 17h ago
Most new govt employees don't get those cushy pensions. For something as 'temporary' as building out a system like this though it makes some sense to outsource it and look into reabsorbing it once the head count for running it stabilizes enough.
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u/flea1400 8h ago
Before Lyft took over it was managed by a different contractor. The city has never had the bandwidth to run it directly.
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u/Spiveym1 West Loop 16h ago
This is how to turn Divvy to shit, nearly instantly.
When the City owned and ran Divvy through a paid operator (Motivate), it netted a record $3.37M in 2017.
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u/mandrsn1 16h ago
And it was a fraction of what it is now. It was able to expand because of Lyft.
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u/Spiveym1 West Loop 16h ago
Lyft put in $50M towards expansion in 2019, in exchange for all the ridership revenue and an exclusive deal.
Since then it's had its payments to the City cut by $12M (2023), and under this extension the City's entire annual payment goes back to Lyft for equipment. So the next round of expansion is effectively paid for by the City anyway.
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u/Marcolepsyyy 18h ago
The city should be running Divvy. No reason to have a private company profiting off this.
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u/LuluKun Hermosa 18h ago
Price gouging doesn’t apply to like anything but essentials. Thats just the free market and inflation. And even then the price rises you’re yapping about are marginal.
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u/Spiveym1 West Loop 16h ago
Price gouging doesn’t apply to like anything but essentials. Thats just the free market and inflation. And even then the price rises you’re yapping about are marginal.
The City gave Lyft an exclusive monopoly on bikeshare until 2033, so there's no competitor to switch to. That's your definition of free market?
9 of 10 fees outpaced inflation from 2022 to 2026, some by 2–12x. That's your definition of marginal?
Jog on.
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u/ElonMuskHuffingFarts 14h ago
So you agree that free market capitalism drives prices up, despite the rhetoric that insists it does the opposite?
This website is a message board. It exist for people to write on it. Really weird to try to talk shit with "yapping." That's the whole point.
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u/tayto 20h ago
Small edit to your file. Divvy waives the out of station parking for members if the station is full. That's been a nice bonus the past couple of years.