Lyft, one of the giants in ride-hailing, that closed on a fresh round of funding that reached $600 million, announced this week it followed the lead of arch-rival Uber by acquiring Motivate, the largest and oldest electric-bicycle sharing company based in North America. Terms of the deal were not disclosed.
Motivate, which in New York is known as CitiBike, as Capital Bikeshare in Washington, D.C., and Ford GoBike in San Francisco was close to selling to Lyft a number of weeks ago and was estimated at that time to have a price tag of more than $250 million
This deal is not a surprise to many following the $200 million that Uber paid to acquire Jump the most direct competitor for Motivate in the U.S. Jump was recently renamed after it previously operated as Social Bicycles.
Whether the acquisition of Motivate and bike sharing provides a new strong stream of revenue for Lyft, or Jump does the same for Uber, is still up in the air. While companies in bike sharing have insisted for a long time they make bikes as cost effective and efficient as possible with manufacturers based in China, they have not yet been able to prove they are lucrative business as of yet.
In 2017, Motivate had thousands of bikes across nine U.S. cities where it has bike-sharing operations, and recorded over 1.8 million rides alone in New York City during May, but still is not profitable.
Nevertheless, the companies are looking at new ways not to only ferry people but other goods as well, which the bike operations enable them to due in a more effective way
The bikes have also provided them with an opportunity to tout commitment to carbon neutrality.
Ride-sharing businesses now have little choice as related to getting more clients to their destinations. As the most recent funding rounds involving companies in the e-scooter industry show plenty of city dwellers prefer to ride a scooter or bicycle to avoid the large amount of traffic that is hitting cities across the U.S. thanks to a strong economy that has been growing for 10 years.
Along with other companies in the e-scooter industry such as Lime, Spin and Bird, both Lyft and Uber applied for permits recently that would give them the right to place e-scooters of their own on San Francisco’s streets.
The question remains if they should build or buy, with Lyft producing prototypes for its own designs of scooters over the last few months.