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Lyft Follows Uber's Footsteps, Enters Bike Sharing Business With Motivate Deal

Lyft Follows Uber's Footsteps, Enters Bike-Sharing Business With Motivate Deal

By Faiz Siddiqui, The Washington Post | Updated: 3 July 2018 12:52 IST

Lyft is getting into the bike-share business, announcing Monday that it has acquired the nation's largest bike-share operator, Motivate.

The ride-hailing company acquired Motivate, the operator of Capital Bikeshare in Washington and New York's Citi Bike, among other bike-share services, in a deal believed to be valued at least $250 million (roughly Rs. 1,700 crores). The company will introduce "Lyft Bikes," seizing on the momentum around dockless and pedal-assist e-bikes in major US cities, and inject resources into the bike-share operator to expand those offerings around the country.

It was not immediately clear where Lyft planned to launch those services; the company declined to comment Monday on the details of any product rollouts.

"Lyft and Motivate have both been committed for years to the same goal of reducing the need for personal car ownership by providing reliable and affordable ways to move around our cities," Lyft co-founder and President John Zimmer said in a statement. "Bringing together Lyft and Motivate will accelerate our collaboration with cities and deliver even better experiences to our passengers and riders."

Ride-hailing companies have indicated they want to make their apps one-stop shops for mobility, enabling users to select a destination and use the appropriate mode of transportation - whether solo or pooled ride, bike or, perhaps scooter - to get there.

Lyft hinted it wants to offer a service similar to Jump Mobility, the e-bike company acquired this spring by Uber. Lyft said it wants to grow existing markets and "work with cities on delivering innovation, including providing dockless and pedal-assist electric bikes to riders around the country," according to a news release on its Motivate acquisition.

In contrast to dockless bike-share and scooter services like Lime, Bird and Spin, Motivate operates fixed-dock services that fueling the rise of bike-sharing around the country. Since launching with 100 stations and just over 1,000 bikes in 2010, Capital Bikeshare has surged in popularity, growing to 4,300 bikes and 500 stations in less than a decade.

The purchase does not include Motivate's bike maintenance and service division, a unionised workforce, which will remain a separate division. Lyft says it inherits Motivate's corporate and technology divisions, and the city contracts that fuel branding agreements such as New York's Citi Bike, San Francisco's Ford GoBike and Portland's Nike-sponsored "Biketown."

Lyft inherits Motivate's city contracts with the deal, it said. Lyft says existing sponsorship agreements will remain in place in the short-term.

It also was unclear how the Lyft deal would affect Motivate-operated Capital Bikeshare. The District of Columbia Department of Transportation did not immediately respond to questions on how Capital Bikeshare could be affected, and whether it planned to retain Motivate - now Lyft Bikes.

Capital Bikeshare is different from other cities' systems because it does not have a named sponsor. The sponsorship agreements are worth millions in annual revenue in some cases, and make up a significant chunk of the revenue derived from bike-share services. While ride-hailing companies might have an interest in rebranding the bikes under their own corporate logos, it could be a tricky prospect because cities have existing contracts with corporate sponsors. Citi Bike's May 2018 operating report said it brought in $6.5 million in total revenue - $4.6 million (roughly Rs. 31.5 crores) in membership and other fees and $1.8 million (roughly Rs. 13 crores) in sponsorship money.

Citi paid $41 million (roughly Rs. 281 crores) to be the corporate sponsor for New York's bike-share system beginning in 2012.

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