Who will buy Citi Bike from Lyft?
U.S. bike-share is on the brink as their ride-hail owner looks for the exit
Five years ago, Lyft bought itself some bikes.
The deal came a few months after Uber acquired Jump Bikes, a startup maker of fire-engine-red e-bikes, as part of its shift toward being a multimodal transport platform. Lyft was forever trailing Uber—in rides, in sales, in cities, in market share—but not this time. If Uber was buying a dockless e-bikes startup with operations in two cities, then Lyft could buy the biggest bike-share operator in the U.S.
The acquisition target, Motivate, wasn’t a household name, but many of its urban bike-rental services were. Motivate was the operator behind Citi Bike (New York), Divvy (Chicago), Capital Bikeshare (Washington DC), and Ford GoBike (the Bay Area, now Bay Wheels), as well as programs in Boston, Columbus, Minneapolis, and Portland, Oregon. In 2017, nearly three-quarters of the more than 35 million U.S. bike-share trips were made on Motivate systems. Lyft paid $251 million, cash. The sale closed in November 2018.
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In many ways, bikes seemed like a natural fit. Lyft cultivated its reputation as the friendly, nice-guy ride-hail platform that cared about things like green transport and sustainability. While Uber expanded aggressively into other countries and other lines of business (food delivery, driverless cars, flying cars), Lyft’s only expedition was a launch in Toronto. Taking over the leading U.S. urban bike rental platform strengthened Lyft’s feel-good, green credentials, entrenched its position in the U.S. cities that formed the core of its business and, finally, gave it something to distinguish itself from Uber.
Five years later, Lyft wants out. Bike-share is a tough business, as any micromobility company could tell you, and new Lyft CEO David Risher has deemed it a distraction. The Wall Street Journal reported late last month that Lyft is seeking buyers for its bike-share division, something the company awkwardly failed to deny in a subsequent statement citing “strong inbound interest” in its bikes and scooters business.
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