Lyft is close to completing an acquisition of Motivate, a New York City bike-sharing company, The Information reports, citing sources with knowledge of the deal which is already said to have been agreed in principle. The purchase is believed to be worth at least $250 million and would provide Lyft with a massive foothold in the market that its largest rival Uber entered in April by acquiring electric bike rental startup Jump for a significantly smaller sum. Motivate is the largest bike-sharing service provider in the United States and has large-scale operations in San Francisco, Chicago, Washington DC, Portland, and Boston, among other major metropolitan areas.
Motivate's last funding round saw it valued at $250 million and all of its previous investors are now expected to cash out while making at least some profit. The startup has been looking for additional funding this spring and was willing to sell its business for at least several months now, as per the same report. The firm is said to have discussed a tie-up with Jump before the latter was acquired by Uber. Motivate's turnover reached some $100 million last year, with the company recently expanding to electric bike sharing, though it's still in the process of determining its optimal business model, especially as its main goal — dockless bikes — is presently facing opposition from some city administrations due to its potential to lead to cluttered sidewalks.
Lyft and Uber's growing interest in bike sharing is believed to stem from the fact that such services are likely to threaten the ride-hailing industry in urban areas in the near future, especially among consumers who are only interested in traveling over shorter distances, something that is more easily achievable with a bike than a five-door car. While agreed in principle, the deal between Motivate and Lyft has yet to be finalized, the same sources claims. Lyft recently expanded its operations to Canada and is presently closing the gap with Uber in the United States, according to several industry trackers.