Lyft debuts 'Lyft Bikes' with Motivate acquisition

Lyft is getting into two-wheeled vehicles. The ride-hailing company confirmed Monday that it's acquired the bikesharing startup Motivate, which will now go under the moniker "Lyft Bikes."

While Motivate isn't a household name, its docking bicycle networks are already in eight major cities across the US. It runs Ford GoBike in San Francisco and Citi Bike in New York City. Motivate also operates other bike brands like Capital BikeShare, CoGo, Divvy, Blue Bikes, Nice Ride and Biketown. As of March, Motivate told CNET it operated 31,841 bikes across the country.

The idea with bikesharing is to solve the last-mile problem in urban areas where traffic congestion can often can make it time-consuming and costly to get around in a car. 

"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," John Zimmer, Lyft co-founder and president, said in a statement.

Bikeshare networks seem to be the next big thing for ride-hailing companies. In April, Uber acquired the dockless bike startup Jump, which has electric pedal-assisted bicycles that can lock to any bike rack or pole. Motivate's vehicles are primarily powered by human muscles and generally are docked, but the company has been experimenting with bikes that have pedal-assists and are dockless as well. Lyft said it'll continue to put resources behind those initiatives. 

Motivate's bikeshare apps are currently more popular than Uber's Jump, according to research firm Apptopia. Nearly twice as many people use the Citi Bike app as the Jump app on a daily basis. Apptopia says all of Motivate's brands combined average about 150,000 daily active users, while Jump averages around 10,000.

As part of the acquisition agreement, Lyft is taking over Motivate's technology, corporate functions and city contracts. But Motivate's bike maintenance and servicing operations will remain a stand-alone business and keep the Motivate name. It's unclear whether sponsorship deals, like Ford with FordGoBike, will remain under Lyft's leadership. Lyft and Motivate didn't disclose the terms of the deal, but earlier rumors said the purchase price could be as much as $250 million.

Uber also looked into acquiring Motivate, but ultimately decided not to pursue the deal, according to a source familiar with the negotiations. One of the reasons Uber didn't go forward with the deal was that  Motivate's bike maintenance and servicing operators are unionized, said the source. This may be why Lyft didn't take over that portion of Motivate's business.

Uber declined to comment for this story.

First published July 2 at 10:02 a.m. PT. 
Update, 11:28 a.m PT.: Added background information.

CNET Magazine: Check out a sampling of the stories you'll find in CNET's newsstand edition.

The Smartest Stuff: Innovators are thinking up new ways to make you -- and the world around you -- smarter.