Why Lyft Aims to Buy the Brooklyn Company Behind Citi BikeThe ride-hailing company would reportedly pay $250 million, just weeks after Uber bought Brooklyn-based Jump cycles
The ride-hailing company Lyft is about to jump into the bike-sharing market by agreeing to buy Brooklyn-based Motivate, the company that operates Citi Bike, according to the tech site The Information. Motivate, which runs bike-sharing services in seven other cities besides New York, is valued at around $250 million.
The reported deal, which hasn’t been finalized or officially announced, comes just weeks after Lyft’s rival Uber agreed to buy another Brooklyn bike-sharing company, Jump, for as much as $200 million. Both car-hailing companies are scrambling to get into the bike-sharing competition as it threatens to eat into their core business.
The two Brooklyn companies provide different variations on the bike-sharing theme, with Motivate focusing so far mainly on conventional bikes stored in docking stations, while Jump has developed dockless e-bikes, which provide a power assist to help riders get up hills.
“If a deal is concluded,” reported The Information, “Lyft will need to accelerate Motivate’s expansion from only allowing riders to pick up bikes from dedicated docks to one where the bikes can be left in more flexible areas, are tracked by GPS and are electric-powered. Those features help drive adoption from consumers.” The Bridge sought comment from a Motivation spokesperson but did not immediately hear back.
New York City recently loosened regulation on e-bikes to allow pedal-assist cycles–though not the fully-powered kind typically used by food-delivery workers–and has put out a request for proposals from dockless-bike companies.
Word of the deal comes when Motivate, which has 700 employees and offices in Sunset Park’s Industry City, just celebrated its fifth anniversary of operating in New York. In a ceremony in Prospect Park last Sunday, Mayor de Blasio declared, “What better way to kick off summer than to celebrate how far Citi Bike and bike share have come in just five years,” said de Blasio. “Since 2014, we have doubled the reach of Citi Bike to more than 12,000 bicycles and 750 stations, making it the country’s biggest and best bike-share system.”
New Yorkers took 17 million Citi Bike trips last year, a record, and are expected to top that with a 13% increase this year, according to Motivate.
The two deals show how quickly two companies that were recently disruptive, with Uber and Lyft upending the conventional taxi business, have had to avoid being disrupted themselves. Like other digital giants including Google and Facebook, they’ve decided to acquire the upstarts. “We see the Uber app as moving from just being about car sharing and car hailing to really helping the consumer get from A to B in the most affordable, most dependable, most convenient way,” said Uber CEO Dara Khosrowshahi when the company announced the deal to buy Jump.
With money pouring into bike-sharing, an intense competition is likely to ensue. Lyft’s likely purchase of Motivate, The Information said, “would catapult the ride-hailing firm into the lead in the bike-share market, ahead of Uber.” Full text of the article is here, behind a paywall.