By Akash Sriram
Lyft (Lyft) is buying mobility platform Freenow from German auto giants BMW (BMW.DE) and Mercedes-Benz (MBG.DE) for 175 million euros ($194.4 million) to expand to the European ride-hailing market, U.S. companies said Wednesday.
Under pressure from Uber Technology (Uber), a major ride-hailing competitor in North America, Lyft has been looking for new ways to grow its business.
The acquisition of Freenow will almost double its potential market and open doors to major European cities such as London, Frankfurt, Paris and Milan, with German companies offering services ranging from traditional taxis to electronic cab rental and car-sharing options.
Lyft CEO David Risher told Reuters that it was a great time to enter the European market at a “favorable price”.
FreeNow operates in over 150 cities in nine European countries. The company said it had reached a breakeven position in September, behind a 13% year-on-year increase in revenue in 2024 and focused on taxi operations.
Lyft said the acquisition nearly doubled its addressable market, with more than 300 billion private trips a year.
“Almost half of Europe's taxi industry is still offline. So that's where a lot of growth potential comes from,” Freenow CEO Thomas Zimmermann said in an interview.
However, its efforts to grow in Europe by capturing more offline markets will face competition from bolt technology from Uber and Estonia, as both companies have a strong influence in the European market.
European regulations are also pushing ride companies to increase driver benefits such as minimum wage guarantee and holiday pay, while also increasing pressure on pricing structures to ensure fair pay.
Bolt recently introduced such as holiday pay and minimum wage guarantees for drivers in the UK to cope with regulatory pressures.
($1 = 0.8821 euros)
(Reported by Akash Sriram in Bangalore; Edited by Krishna Chandra Eluri)
