Lyft, the ride-hailing company, is considering selling its bike and scooter business, which includes the popular Citi Bike in New York City. This decision comes after Lyft laid off a significant number of employees in an effort to cut costs.
According to Lyft, they have received a lot of interest in their bikes and scooters business and are open to exploring strategic partnerships and options to serve more riders in more cities. They want to ensure that even if they sell the business, the rental bikes and scooters will still be available on the Lyft app to avoid any disruption for riders.
In 2018, Lyft acquired Motivate, the largest bike-sharing operator in North America, for $250 million. At that time, dockless bikes and scooters were becoming popular, but Lyft believed that docked systems, where bikes could be locked and unlocked from fixed docking stations, were a smarter choice. This decision was influenced by the fact that cities were cracking down on dockless operators as they competed with existing bike-share programs.
Lyft continued to invest in bikes and scooters by acquiring PBSC Urban Solutions, a company that supplies docks and bikes for bike-share systems globally. However, Citi Bike remained the most valuable asset for Lyft in the bike-sharing space. With over 114,000 riders each day in June 2023, Citi Bike generated more than $14 million in revenue, including membership fees and sponsorship money.
The popularity of Citi Bike has been steadily increasing, with a 33 percent year-over-year increase in ridership in 2023. These blue bikes have become iconic in New York City, appearing in various TV shows and movies and becoming highly desirable in neighborhoods.
Unfortunately, Lyft’s financial situation has worsened this year. The company’s stock price has dropped as it loses market share to Uber and faces staff layoffs. The founders of Lyft, Logan Green and John Zimmer, have stepped down from their executive roles, and the new CEO, David Risher, has made significant changes, including firing over 1,000 employees and implementing return-to-office requirements that have not been well-received by the remaining staff.
While the sale of Citi Bike is likely to be successful due to its exclusive contract with the city, smaller bike-share systems that generate less revenue and lack the same level of exclusivity may not fare as well in a sale.
Overall, Lyft’s decision to explore a sale of its bike and scooter business reflects its focus on reducing costs and streamlining its operations. The outcome of this sale will determine the future of bike-sharing in Lyft’s portfolio and the impact on riders in different cities.
