In a blog post announcing the acquisition and the new Lyft Bikes services, Lyft said it “will invest to establish bike offerings in our major markets and pursue growth and innovation in the markets where Motivate currently operates.”
The purchase, which was rumored to be worth $250 million according to a report in The Information last month, underscores a significant shift in urban transportation—and a big bet by the company—toward a more multimodal, mobility-as-a-service future, where riders have a host of options to get across town and eschew private vehicle ownership.
The deal specifies that Lyft will obtain Motivate’s technology and corporate functions, including its city contracts, while Motivate, as it currently exists, will remain a standalone business dedicated to servicing existing city contracts.
“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,” said Lyft co-founder and president John Zimmer in a statement. “Bringing together Lyft and Motivate will accelerate our collaboration with cities and deliver even better experiences to our passengers and riders.”
Motivate, which operates a number of popular bike-share programs, including New York’s Citi Bike and San Francisco’s GoBike, earned $100 million last year.
Analysts speculate that both Uber and Lyft see the rise of numerous on-demand transportation options as a threat to growth in the urban transportation market, especially for short, frequent trips. Bike-share ridership data compiled by the National Association of City Transportation Officials suggest these services are thriving: 35 million bike-share trips were taken in 2017, an increase of 25 percent from 2016.
According to the newest household travel survey conducted by the U.S. Department of Transportation, 35 percent of U.S. vehicle trips last year were two miles or less, ideal for new options such as dockless bikes and electric scooters.
The deal comes on the heels of Uber’s purchase of Jump, a dockless electric bike-share system that operates 12,000 bikes in 40 cities around the world. In addition, Lyft has examined the possibility of launching a scooter service in San Francisco, and Uber has also expressed interest in scooters. Investment in the industry has grown dramatically in recent months; Bird, the Los Angeles-based scooter startup, just announced a funding round that may value the company at $1 billion.
By integrating these mobility options, the ride-hailing giants can offer a more holistic suite of transit options within a single service and app, creating a mobility-as-a-service company that can accommodate everything from a short errands run to a ride to the airport.
According to The Information, Motivate had been seeking financing or opportunities to be acquired by companies like Uber or Lyft. The company’s pitch to potential investors hinged on the value of its bike-share deals with large cities, including exclusive contracts in New York, Boston, and San Francisco, as well as deals in Chicago and Washington, D.C. Motivate has begun testing dockless and electric bikes, with plans to offer dockless bikes in Minneapolis and San Jose, California.