Lyft Inc. (NASDAQ: LYFT) shares edged lower by 4.4% on Monday morning after the ride-hailing service Company pulled thousands of electric bikes from several cities. Lyft removed bikes in New York, Washington, and San Francisco because of a braking problem with the bikes, according to CNBC.
“We as of late got few reports from riders who experienced more grounded than anticipated braking power on the front wheel,” the Company said in a blog entry messaged to clients on Sunday.
Lyft’s bike division is looking to replace about 3,000 bikes in New York, Washington, and San Francisco with traditional bikes to prevent service interruptions. The Company operates about 17,000 traditional bikes in those cities.
The removal of the bikes impact several bike sharing services such as Citi Bike in New York, Capital Bikeshare in Washington D.C., and Ford GoBike in San Francisco.
“After few reports and out of a wealth of alert, we are proactively stopping our electric bicycles from administration, said Citi Bike representative Julie Wood. “Security dependably starts things out.”
Lyft predominantly operates as a ride hailing service where users can simply request a taxi service on their smartphone devices. However, Lyft has tried to expand previously and bought Citi Bike operator Motivate last year in order to compete against Uber Technologies purchase of JUMP Bikes months before.
Uber Technologies is also a ride hailing service, however, compared to Lyft, Uber is much more diverse. Uber’s main business is its ride hailing, but the Company also offers bike and scooter rentals, freight hauling, food delivery, and even a self-driving division.
Additionally, Uber is a major international company that operates in over 70 countries. Uber is reportedly valued at approximately USD 120 Billion compared to Lyft’s market cap of USD 19.38 Billion on Monday morning.
Lyft launched its initial public offering at the end of March 2019. Since then, Lyft shares have plunged by 26.7% since its IPO.