Lyft has made a lot of headway this year, but its latest foray into bike-sharing services is suffering a bit of a setback this week. Unfortunately the Lyft-owned bike-sharing services Citi Bike, Capital Bikeshare, and Ford GoBike have recalled their e-bikes from fleets throughout New York, Washington, and San Francisco, respectively, over brake issues. Some users—a small percentage—have reported “stronger than expected braking force on the front wheel.”
Citi Bike has commented that new e-bikes are on the way but, in the meantime, have replaced. Collectively, the companies have issued statements that, essentially, describe that the removal of about 1,000 electric bikes, in total, is more precautionary than presumptive. And until the glitch can be fixed, they are indefinitely removing the pedal-assist feature from the service.
Unfortunately, this malfunction has already resulted in a few injury reports. And with that, Motivate has reached out to its main brake supplier, Shimano. Motivate also reached out to a third-party engineering firm in order to determine the source of the problem. And fixing the problem is important, of course, because these bikes can reach a maximum speed of 18 miles per hour, thanks to a pedal-activated motor.
While the issue is not dire, its proliferation this week comes a little too early into the life of Lyft’s new IPO. It only began trading publicly quite recently and, in fact, its valuation of more than $24 billion might have lead the service to acquire Citi Bike, Capital Bikeshare, and Ford GoBike parent Motivate only a few months ago. And, at around the same time, Lyft announced a new $100 million investment to expand CitiBike operations in New York City. This plan had sought to triple Motivate’s required 12,000 bikes to an impressive 40,000 over the next five years while simultaneously doubling the service’s coverage area (which will be 35 square miles).
At present, Motivate operates approximately 200 e-bikes in Washington, as well as 1,000 in San Francisco.
All in all, though, the problems they are experiencing with the e-bikes may have contributed to the share drop at the top of this week. By midday, Lyft shares had already fallen more than 5 percent, on Monday, bringing the stock to its lowest rating since posting its IPO. Shares fell to $56.57 per share, which is 35 percent down from its $87.24 opening; and the company has fallen 27 percent since its first close ($77.75 per share). Lyft’s IPO was priced at $72 per share but is now trading down 21 percent.