Lyft is Uber’s biggest competitor when it comes to ride-hailing services. Now, the company is also looking to make its mark on bike-sharing a few months after Uber decided to do the same. Both companies are planning to diversify their transport options and bike-sharing looks like a good place to start. Lyft confirmed on Monday that it’s in the process of purchasing the core operations of Motivate, the parent company that owns CitiBike. The entire business will be renamed Lyft Bikes.
Motivate operates bike-sharing services in a number of major cities in the US including New York, Chicago, and six others. Lyft didn’t reveal how much money Motivate will cost. However, it was previously suggested that Lyft could, in fact, pay up to $250 million for the deal. Uber and Lyft are dominating the ride-hailing industry in the United States. However, over the last few years, we have started to see the emergence of other forms of transport, especially in major cities.
The bike-sharing market is not that big, at least not yet. However, its growth could easily undercut car transport, a core part of Uber’s and Lyft’s business. Getting into bike-sharing will allow Uber and Lyft to ensure that people are still using their services even in cases where a car wouldn’t make any sense, especially for short trips.
The bike-sharing model has been very successful in some countries in Europe and also in China. The US, of course, has its own challenges but as people become more aware of the bike option to move around big urban centers, it’s very likely that this market will grow. Uber was the first ride-hailing service to enter the bike-sharing market back in April this year. The company announced the acquisition of Jump which runs a network of electric bikes. The deal cost Uber $200 million.
Motivate is the biggest provider of bike-sharing services in the US. The company has a total of 800 employees. It’s estimated that Motivate is responsible for at least 80% of the total bike-share trips taken in the US over the last 12 months. Lyft hopes that Motivate’s massive market share and experience in this space will help it easily compete with Uber.
Although Lyft has trailed Uber for many years as a ride-hailing service, the company has managed to attract funding only recently. This funding has made acquisitions like this latest one possible. Just the other day, Lyft managed to raise an additional $600 million in capital in a new financing round that valued the ride-hailing service company at $15.1 billion. Fidelity Investments was one of the key investors in this latest round. This shows that Lyft is increasingly raising enough money to compete with Uber. Even though its market share in the ride-hailing business is still not as huge as Uber’s, the company has made significant progress in the recent years so it’s no wonder that it’s continuing to attract many investors.