The famous ride sharing company Lyft has purchased Motivate – the country’s oldest bike sharing company. The move keeps them head to head with Uber in moving into potentially lucrative territory – the bike rental business.
Motivate operates Citi Bike in New York City, Capital Bikeshare in Washington D.C., along with several other bike-rental programs in the United States.
While they didn’t disclose the exact terms of the deal, recent discussions center around a $250 million price tag.
Of course, the battle is yet another move in a consistent chess game between Lyft and Uber. Which company will monopolize the ground transportation industry in the United States. Back in April, Uber bought Jump Bikes – an electric bike rental start up.
Motivate has specialized in traditional bicycle rentals – you know… The ones that you see stores in docking states around major urban metropolises. The company has begun to experiment with electric bikes. It’s got agreements with officials in San Francisco, Chicago, and other major cities.
Lyft Buys Motivate, But Will the Bike Rental Industry Take Off?
The only problem? There’s more and more companies who are creating bikes and scooters that don’t need to be returned to the dock. With these brands, you can leave vehicles on any sidewalk, and the next person to rent them will pick them up. While cities aren’t necessarily sure how to regulate such services, the convenience could be unparalleled, knocking Motivate – and Lyft – out of the running.
Bike sharing may or may not end up being profitable for Lyft and Uber. While these companies have said that their business models claim to be efficient and cost-effective, they have yet to prove that they’re actually lucrative. For example, Motivate recorded over 1.8 million bike rides in New York City in the month of May. Still, they didn’t make a profit.
Of course, a part of the reason ride sharing companies like Lyft and Uber are getting involved in renting bikes or e-scooters is because of consumer insight in major cities. Due to increased road congestion, urban dwellers are increasingly turning towards other ways to get around. If a bike or an e-scooter will help them to avoid automobile traffic, they’ll opt for this kind of transportation instead. So it’s possible that as the tides turn and more people turn to alternative forms of transportation, companies like Motivate will actually yield tremendous success. At least- that’s what they’re hoping.
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Data Source: Bloomberg.com, techcrunch.com