It’s official: The 133-year-old bicycle is the hottest thing in tech. Today, Lyft announced it has acquired North America’s largest bike-share operator, Motivate, for a reported $250 million. The move comes just three months after archrival Uber took over Jump Bicycles, a smaller and flashier dockless electric bike-share company, for $200 million. And thus, the urban transportation wars click into a higher gear, as the fight moves to the bike lane.
In a blog post, Lyft said it would take over Motivate’s technology and corporate functions, including, critically, its city contracts. (Motivate’s bike maintenance and service operations will remain a standalone business.) Last year, Motivate was responsible for nearly three-quarters of US bike-share trips.
On its face, the acquisition of Motivate—which will be rebranded Lyft Bikes—makes a ton of sense. Ride-hailing companies are nervous that vehicles like cycles and scooters will cut into their business by giving people cheaper, traffic-free options for making short trips through dense areas. So instead of fighting these new modalities, the ride-hailing giants bought them out.
But Lyft’s latest purchase isn’t just about consuming another slice of the transportation pie, because Motivate brings more than bikes. It brings contracts with cities, and the years-long relationships with city officials that forged them. That could be the sort of advantage Lyft needs to dominate transportation across the city landscape, no matter your mode of choice. If, that is, it can answer a few pesky questions.
Motivate has decade-long agreements with some of America’s biggest cities, including Boston, Chicago, New York, the District of Columbia, and the San Francisco Bay Area. Some of those (including New York, the Bay Area, and Boston) are exclusive, meaning no one else is allowed to operate a bike-share in the area.
Yes, there have been exceptions. San Francisco’s Municipal Transportation Agency managed to carve out an asterisk for a 250-bike pilot by the dockless ebike company Jump (yep, the one acquired by Uber), but that small concession came only after aggressive arbitration with Motivate. Lyft says its acquisition won’t affect Motivate’s existing contracts.
But is that true? Uber also took a close look at Motivate before Lyft cut the check, and a source familiar with those negotiations says Uber worried those contracts left room for cities to renegotiate or even cancel exclusivity if control of the company changed hands.
(When asked about how the acquisition might affect New York’s contract with Motivate, which runs the popular Citi Bike program, a spokesperson for the city’s Department of Transportation said “the City first needs to review as part of the approval process.” A spokesperson for the Bay Area’s transportation authority did not respond to specific questions about its contract with Motivate. A DC DOT spokesperson demurred: “It would be premature for the agency to comment on the agreement, but we look forward to the continued expansion of Capital Bikeshare.”)
The prospect of losing that exclusivity should make Lyft a little nervous. Well-funded dockless bike- and scooter-share companies, like Bird, Lime, Ofo, and now Uber, are eager to get their wheels on city sidewalks, and not having to deal with Motivate’s monopolies could make that a bunch easier. Spokespersons for Lyft and Motivate did not respond to questions about city contract exclusivity.
One thing Lyft definitely gets from this deal: a whole lot of bike-share stations. The conventional wisdom around Silicon Valley is that dockless, not docked systems, are the future, so this may seem unhelpful. Indeed, running a docked system comes with increased capital costs—you’ve got to install and maintain all those stations, after all.
But these occupied corners—most of them in downtown areas, near transit—might be super helpful for a ride-hailing company. Increasingly, Uber and Lyft have recognized that they need more curb real estate. Dropping off and picking up riders in bike lanes or in the middle of busy roads is dangerous and disruptive, and both companies have experimented with city-sanctioned pickup and drop-off zones. These zones should reduce traffic and tickets for drivers and make it easier for customers to find their rides.
So it’s not crazy to think Lyft could use this new real estate to build what urban transportation nerds have dreamed about for years: “mobility hubs,” where riders switch between a bike and a car and the public bus and the subway. Could a station be a place to charge electric bikes and scooters and maybe even cars? Keep your eyes on the corners—and, of course, the limits of Motivate’s contacts, which probably limit what Lyft can do with these spaces.
The idea of a physical space where users can choose between different sorts of transportation modes dovetails nicely with another big Lyft and Uber ambition: becoming the go-to app for city transportation. A “mobility marketplace” for all.
“Not all trips are going to be taken by Lyft,” says Susan Shaheen, an engineer who studies mobility at UC Berkeley. “Acquiring bike-sharing stations and assets is a step toward this and perhaps competition with private auto reliance and use.”
Said a different way: Both Lyft and Uber would like you to open their app every time you need to leave your home, even if you know you want to take a public bus or a scooter. In fact, both Lyft and Uber applied for permits to operate scooter-share businesses in San Francisco. Uber also unveiled a partnership with the mobile transit ticketing company Masabi in April, which will allow some commuter rail riders to buy their tickets from right inside the Uber app.
“We want to be the Amazon for transportation,” Uber CEO Dara Khosrowshahi said in May. Lyft wants in, too.
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