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I understand the plight of the union and the fear of instability, but in all honesty the biggest criticism of this move is that it's basically a conflict of interest for Lyft. It's mentioned in the article! Lyft wants people to pay up to get a car ride somewhere. Bikeshares encourage people to not get rides from place to place, either cycling directly to a destination or to a public transit stop. And Lyft won't get more money from bikes than they do from car rides, so they're basically incentivized to provide a sub-par bikeshare experience to push more Lyfts.
This is the best take I've heard on the matter. Even ignoring Lyft's track record as a worker-hostile company and pretending that public-private partnerships as a concept aren't absolute fucking cancer to city services, why would anyone hand over control of a crucial piece of transit infrastructure to a corporation that only exists to replace that infrastructure?
I'd say this applies to every instance of a private company taking over a public service. But it does apply more in this particular case for the reasons you pointed out.