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Lyft Buys Bike Sharing Company Motivate, Parent of New York-Based CitiBike

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【Summary】Uber’s main U.S. rival Lyft is getting into the bike-sharing business, as it looks to expand its transportation options to bikes. Financial terms were not disclosed, but media reports previously suggested that Lyft would pay close to $250 million for Motivate’s bike-sharing business.

Jeremy Carlton    Jul 02, 2018 5:09 PM PT
Lyft Buys Bike Sharing Company Motivate, Parent of New York-Based CitiBike

Uber's main U.S. rival Lyft is getting into the bike-sharing business, as it looks to expand its transportation options to bikes. Financial terms were not disclosed, but media reports previously suggested that Lyft would pay close to $250 million for Motivate's bike-sharing business.

Lyft said on Monday that it was buying the core operations of Motivate, the parent company of New York-based CitiBike, which offers an app-based bike sharing service. Citibike is named after financial services company Citigroup, its largest investor. Citibike was formed in 2013 in New York. Motivate also operates the San Francisco bay area service GoBike for automaker Ford.

The new business will be renamed ‘Lyft Bikes' and will maintain control of Motivate's bike-sharing contracts with New York City, Chicago and six other U.S. cities. Motivate will continue to maintain the bikes and remain a stand-alone company. Citibike reported around 62,000 daily riders in October 2017.

The move comes after Lyft's biggest rival Uber entered the bike-sharing market in April when purchased startup Jump, a company operating a network of electrically-assisted bikes. The deal was reportedly worth around $200 million.

While Uber and Lyft dominate the ride-hailing market in the United States, other seamless modes of transportation are gaining popularity, like bikes. The deal with Lyft might eventually include a bike rental option directly from the Lyft's smartphone app.

By offering alternatives to ride-hailing directly from their consumer apps, transportation companies such as Uber and Lyft are looking to keep customers from using competing bike-sharing and electric scooter sharing services. Companies including Bird and Lime have recently launched electric scooter and bike rentals in U.S cities.

Motivate is currently the largest provider of bike-sharing services in the United States. The company estimates that it was responsible for 80 percent of all bike-sharing trips. The company operates in major cities such as Boston, New York, Washington DC and Chicago.

Despite trailing behind Uber in the ride-hailing market, Lyft is quickly gaining ground on rival Uber. The San Francisco-based company has managed to raise significant capital recently. Last week, the company secured an additional $600 million led by Boston-based Fidelity Investments, raising Lyft's valuation to $15.1 billion.

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