Lyft Buys Bike-Sharing Company Motivate

Lyft will take on existing contracts like New York's Citi Bike.

Ford

Lyft has acquired Motivate, the bike-sharing company that operates services like New York's Citi Bike and Ford's GoBike in San Francisco. The contracts for these services will be passed onto Lyft, giving the ride-hailing company a major share of the bike-sharing market.

Motivate currently accounts for 80 percent of bike-share trips in the United States, according to Lyft. In addition to New York City and San Francisco, the company operates bike-sharing services in Boston, Chicago, Minneapolis, Washington, D.C., Portland, Oregon, and Columbus, Ohio. Lyft did not disclose how much it paid for Motivate, but it was reported in June that the deal was worth around $250 million.

A Lyft blog post said the company plans to "invest to establish bike offerings in our major markets and pursue growth and innovation in the markets where Motivate currently operates," but did not offer specific expansion plans.  Lyft will acquire all of Motivate's existing city contracts, some of which make Motivate the exclusive bike-sharing operator in a given city. Motivate's servicing and maintenance operations will remain a standalone business, retaining the Motivate name, Lyft said. The company did not say whether bikes would be made available through the Lyft app.

The acquisition gives Lyft control of the largest bike-sharing operations in many cities. However, it also comes as Motivate faces stiffer competition from dockless services, which allow bikes to be picked up and dropped off anywhere, and electric-assisted bikes, which Motivate has been slow to deploy. Lyft said it would work on developing both technologies.

In the meantime, regulations may keep the competition in check. Last year, Uber and Jump launched a dockless bike-sharing pilot in San Francisco using electric-assisted bikes, but restrictions on dockless bike sharing meant Jump was only allowed to deploy 250 bikes. Uber allowed users to reserve bikes using its app, but because of the limited number of bikes, the option was only given to a limited number of customers. Dockless bike sharing is more convenient for users, but because bikes can be left anywhere, they have become a headache for city officials. The same goes for the scooter-sharing services cropping up in some cities.

Bike sharing could become the next area of competition for Uber and Lyft, but Lyft's acquisition of Motivate gives the smaller ride-hailing company a major head start. Both companies have also applied for permits to operate networks of electric scooters in San Francisco.