Lyft follows Uber by acquiring bike-sharing startup Motivate
The $250-million deal gives the company access to thousands of bikes in eight U.S. cities
Ride-hailing firm Lyft Inc. said it agreed to purchase an urban bike-rental company recognizable by its curbside docking stations and sponsors like Ford Motor Co. and Citigroup Inc.
The deal for Motivate International Inc. gives Lyft access to thousands of bicycles for shortterm rental and a potential leg-up on bigger rival Uber Technologies Inc., which recently bought smaller dockless bike-rental company Jump.
Lyft is spending about $250 million ($329 million Canadian) in cash for the New York City company, according to people familiar with the matter, which compares with $200 million for Uber’s deal.
The two rivals are clamouring to give riders options for short
trips within cities as scooters and bikes have become a popular option. Venture-capital firms have poured hundreds of millions into upstart electric scooter rental firms like Bird Rides Inc.
Bike-sharing, scooter rentals and even flying taxis are attractive to the largest ride-hailing companies because they offer customers a cheaper and oftentimes quicker means to travel within dense cities. Uber has said the average Jump ride in San Francisco was 2.6 miles.
Lyft will gain about 30,000 bikes in eight U.S. cities from San Francisco to New York. Customers can rent them for intervals of 30 minutes typically for $3, or $10 to $12 for a day pass, depending on the city, and must return them to other docking stations.
Uber’s Jump, available in just a handful of cities, is $2 for 30 minutes and the bikes can be left anywhere a customer can lock them.
Motivate has one advantage over Jump and a host of other bike-rental firms like Neutron Holdings Inc.’s Lime, which plan to bring thousands of bikes to
U.S. cities: exclusivity. In New York, San Francisco and elsewhere Motivate has negotiated exclusive deals to be the lone provider of bike-sharing. That means other outfits will have to reach deals to enter a city, rather than just placing their bikes on streets for rental.
Motivate took in about $100 million in revenue last year, with roughly half of that coming from sponsors who adorn the company’s bikes with their logos, according to people familiar with the matter.
Lyft carefully structured the deal to avoid adding about 600 Motivate workers represented by the Transport Workers Union. Those functions, which include bike maintenance and servicing operations, will fall under a new, separate company retaining the Motivate name, Lyft said. Appbased transportation companies have resisted workers from forming unions, including in Seattle where Uber and Lyft drivers have attempted to organize.