Protected bicycle lanes are held up as the end-all of bicycle infrastructure, with unprotected bicycle lanes being widely considered unsafe and inferior. This perspective is supported by existing research showing people’s preference for protected versus unprotected bicycle lanes. Scant research, however, has explored this topic area using an observational research method. If an observational method is used, the research is typically count-based and focused on a predetermined sets of variables identified before the observation period and this hinders the research from advancing findings beyond frequencies and the already known variables. Without a clearer understanding of how people are using and interacting on streets with either type of bicycle lane, it is difficult, if not impossible, to adequately assess whether, and which, facility type best accommodates safe bicycle mobility. This paper introduces a new qualitative-quantitative method for conducting observational research which takes a grounded theory approach to gain new insights into how people behave and interact while using street segments, intersections, and other public places. This method follows a four-step process which involves qualitatively identifying interactions recorded on video, using deductive and inductive logic to document independent variables associated with interactions, and concludes in a quantitative analysis of the qualitatively produced data. As a display of the applications of this method, a case study is presented here which uses the new method to investigate the interactions of bicyclists with other road users on a street segment with an unprotected bicycle lane in Munich, Germany.