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Lyft to acquire Biketown operator Motivate for $250 million

Posted by on June 1st, 2018 at 11:23 am

Portland’s bike share system is now managed by Lyft while it uses bikes and technology owned by Uber.

On the same day Biketown launches a major service area expansion and host of other changes, Lyft is finalizing a $250 million deal to acquire Motivate, Inc. — the company that operates Portland’s bike share system.

The deal has potentially huge implications for the future of not only bike share in Portland, but the sharing of all types of last-mile solutions including bikes, electric-bikes, and “micro-mobility” vehicles like electric scooters.

It’s also sort of an awkward mess. Here’s why: The bright orange bikes Motivate uses in the Biketown system were designed and made by a company known as Social Bicycles, which was re-launched as Jump Bikes in January. Then in April, Jump was acquired by Uber, Lyft’s main rival. That means Portland’s bike share system is now managed by Lyft while it uses bikes and technology owned by Uber. What could possibly go wrong?

“Motivate is now dependent on Jump, a.k.a. Uber, to provide their service. If they don’t provide the service, they’re on the hook,” William Henderson, a Portland-based mobility software expert and CEO of Ride Report told us in an interview this morning. Henderson was referring to Portland’s bike share contract, which puts the onus for success squarely on the shoulders of the operator.

This might be a problem.

Biketown bikes have specific technology built into them that’s integral to the rest of the system. Even if Uber would sell Lyft/Motivate more bikes (highly unlikely), the new bikes would likely have very different technology and features which would make inter-operability a challenge.

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How will Lyft/Motivate keep Biketown running strong if it can’t get any new bikes? Biketown General Manager Dorothy Mitchell told us via email this morning that despite a service area that has expanded from eight square miles in 2016 to about 12 square miles as of today, they are not adding new bikes to the fleet. Instead, they’ll rely on users and staff to rebalance the system. “We’re feeling good about the current fleet being able to meet the need in our service area,” Mitchell shared with us via email this morning.

These inherent contractual limitations only apply to bike share. The contract does not explicitly give Lyft/Motivate an exclusive license for scooters. Because of that, Henderson sees a lot more of them on the local horizon. As we reported last month, Portland is set to launch a pilot program of dockless electric scooters this summer. “Almost certainly what will happen in Portland is that there will be a huge rush of scooters sometime this summer,” Henderson says. “If you look at other cities where scooters have launched, it’s an overnight success. They will run circles around the bikes for utilization rates and trips-per-day.”

Henderson thinks that the popularity of e-scooters will lead to more people clamoring e-bikes. But with Lyft as the operator, it’s hard to say at this point where they’d come from with their rival Uber in control of the supply-chain.

If Motivate’s bikes and tech haven’t kept pace with the dockless wave, why would Lyft spend $250 million for them?

The answer is that what Motivate lacks in technology, they make up for in relationships. It’s very likely Lyft is more interested in using Motivate’s valuable existing contracts and contacts with cities than their clunky bikes and old-school kiosks. Where those contracts are exclusive, like in Portland, all the better to keep a growing list of pesky start-up competitors away.

Meanwhile, Lyft is almost certainly eyeing the bike and scooter-sharing market themselves. GreenBiz.com reported on Tuesday that, “To Uber and Lyft, adding different types of mobility options makes sense as a way to grow their customer base and also offer vehicles that don’t clog urban areas.”

Further evidence of Lyft’s push into this space came via a tweet from industry insider Michal Naka yesterday that showed how the company is hiring a team of “last mile engineers”. Beyond mere speculation, Lyft is reportedly on the verge of launching their own fleet of electric scooters in San Francisco.

Henderson posits Lyft is still 6-12 months away from launching a new bike or scooter product of their own. And even if they were ready today, they’d still have to figure out what to do with the 1,000 bikes and 100 docking stations we have on the streets today — all of which are getting older and more outdated with each passing day.

Stay tuned. This is going to get very interesting.

(The City of Portland/Biketown declined an opportunity to comment on this story.)

— Jonathan Maus: (503) 706-8804, @jonathan_maus on Twitter and jonathan@bikeportland.org

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bikeninja
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bikeninja

The scariest thing to me is that this duel of the titans is between two companies that have never made any money ( profit) and have no near term prospects to do so. If we have a recession and the easy money ( venture capital, junk bonds, patient investors) stops flowing both these companies could dry up and blow away in the wind as fast as they came leaving bikeshare high and dry in terms of both equipment and an operator.

Dwaine Dibbly
Guest
Dwaine Dibbly

Lyft is buying Biketown to shut it down, or to at least damage it in such a way that is no longer competition to their main business.

Columbo
Guest
Columbo

Don’t forget that Trimet’s ticket app prompts you to book a Lyft or Car2Go. Never liked that. Feels like surrender.

Paul Frazier
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Paul Frazier

Maybe, just maybe this move will put more pressure on City Hall to allow other bike shares into the city. Still feels weird to me that they are allowing a monopoly.

psyqlst
Guest
psyqlst

Isn’t it a little strange that the two companies that endanger Portland cyclists every day are the ones buying bike share programs. Uber and Lyft should spend more money educating their drivers on how to drive, how to not double park in bike lanes and anything else related to safe driving. I refuse to use either one!

billyjo
Guest
billyjo

zipcar was a very functional service that had cars everywhere I needed one. They sold off, got bought out and got rid of most of the cars I used. Soon the service area was shrunk and the options were fewer. Prices went up.
car2go got rid of the smart cars and now only does $20 an hour luxury cars. Reach has always only been about high priced luxury cars. Both of them, if you get somewhere you are in no way guaranteed you can get back from there since when someone else takes the car there may well not be one anywhere close……

So I went out and bought a car. It was cheaper.

How long until they start worrying about which station is the most profitable? Closing many down and having a ridiculous service area filled with upcharges and fees?

At what point will you look it up and find out the nearest bike is 1.2 miles away?

As it stands now, from looking at the data, Biketown is for visitors to ride a bike around the river. Do you think a company like lyft will compete with themselves to change that business model?

Shoupian
Subscriber
Shoupian

PBOT currently collects a 50 cents per ride charge on all TNCs (taxi, Lyft, Uber) but the current rules require the revenue to be spent ($4.4 M in 2017) on TNC-related items. I wonder if Lyft’s acquisition of motivate would open up possibilities to spend some of this TNC revenue on things that can improve bikeshare. Does anyone knowledgable in this area have any idea?

Kyle Banerjee
Guest

“And even if they were ready today, they’d still have to figure out what to do with the 1,000 bikes and 100 docking stations we have on the streets today — all of which are getting older and more outdated with each passing day.”

Got a kick out of that quote.

I have 5 bikes, the newest of which is 10 years old. Ain’t nuthin’ outdated about any of them 🙂

Al Dimond
Guest

Embrace. Extend. Extinguish.

John Liu
Guest
John Liu

Normally, contracts will provide for contingencies such as the prime contractor or a key supplier being acquired. You wouldn’t build your entire program around a sole-sourced product without guarantees that the product will remain available or at least that you’d have an opportunity to acquire more before the product is end-of-life’d.

Ed
Guest
Ed

I think I picked the wrong day to sign up for a year of Biketown.

Peter W
Guest
Peter W

Strange times –

Lyft is also trying to kill an EV bill in California (pushing them and Uber to use more zero-emissions vehicles over the next 12 years). (SB 1014)

You’d think instead they’d just lobby to have the bill count bikes toward their zero-emissions goals.

John Liu
Guest
John Liu

I have no doubt e-scooters will be popular, especially with tourists. Are they really useful for commutes, especially longer distances? How many people will be riding an e-scooter from NE 50th to downtown?

Recall the recent NACTO study of bikeshare said that dockless systems tended to have highest use on weekends and short trips, suggestive of tourist and recreational use, while dock systems had highest use during commute hours, suggesting of daily commuter use.

Portland needs a bikeshare system that works for residents commuting and doing other daily things, so that it can reduce commuting by car. Putting tourists on e-scooters is nice but secondary.

Portland also needs its bikeshare to be run for the benefit of residents, not for the benefit of investors and profits.

Seeing Uber buy Social/Jump and Lyft buy Motivate is worrisome because those companies’ primary interest is their TNC and if they continue to lose huge amounts of money, non-core businesses like Jump and Motivate could potentially suffer. Or, on the more optimistic side, they could bring levels of investment to bikeshare technology that small companies like Motivate and Social maybe couldn’t. So it could be bad or it could be good.

But either way, Biketown itself has to remain a publicly owned and managed system. Unless you want an important part of our transportation infrastructure to be run with the ethics and motivations of, say, Uber.

Jim Lee
Guest
Jim Lee

Yes , Lieutenant Columbo, owning and daily using
one’s own bicycle is best: more convenient; cheaper; ineluctably better riding.

Beth
Guest

Not long after Biketown was launched, I hosted a friend from out of town for a quick layover. We took a bike ride. Since she’s a LOT shorter than I am, we had to rent and she elected to go with a Biketown bike.
It was, in a word, terrible. Functionality was klunky and fit was uncomfortable.
Needless to say, when friends come to visit, I borrow a bike in advance in their size so we don’t have to use Biketown.
So all this handwringing about Uber and Lyft doesn’t really concern me.
You want decent public transit? Then support it by using it. Trimet won’t pay attention unless ridership goes up, and public transit in this town is still the best deal going — and far better than in many US cities.

Sam Churchill
Guest

Maybe Motivate/Lyft will freeze the Jump electric bike (made by Geneze) and switch to Lime Scooters or (more ideally) the A2B ebike, made for SwiftMile.
https://electricbikereport.com/swiftmile-electric-bike-solar-charging-stations-videos/

Venture capital has forced out the best idea of all: neighborhood run bike sharing.

Locally operated by bike shops, neighborhoods, or even individuals, a solar-powered charge station had the potential of delivering a cost/effective, locally owned, resilient, post earthquake communications node. It could have benefited everyone and delivered real service. The pieces were all coming together. The VC’s panicked. Now we’re headed down the rabbit hole.

Sam Churchill
Guest

With Lyft buying Biketown operator Motivate for $250 million, here’s what COULD happen:

– Uber will incorporate Jump Bike rentals into their Uber App.
– Lyft/Motivate will stop incorporating Jump electric bikes and switch to Scooters or the A2B ebike, made by Geneze, with a SOBI lock mechanism.
– Getaround and Turo, which rent personal cars, will move to an umbrella hub for both personal cars and bikes.
– Zipcar, Car2Go and ReachNow will team with Portland’s Moovel, for integrated bike/car rental hubs, some of which will use electric cars and bikes.

http://www.hayden-island.com/biking/

GlowBoy
Guest
GlowBoy

Hello, Kitty
Only true if 5 people in a car is anything more than an outlier. I was assuming in-use seatbelts; otherwise I could dramatically up my efficiency by throwing a crate of seatbelts in the trunk.Recommended 1

5 people in a car is definitely an outlier.

Aaron Cohen
Guest
Aaron Cohen

I live near Mount Tabor so am crossing my fingers once Jump and Lime bikes come to town like in SF that Portland city officials forces them to have e-bikes all the way out to 82nd or farther east equal side west and east like they did with scooter pilot. #equity