Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
Uber’s biggest US rival, Lyft, is expanding its ride business across the Atlantic for the first time with the acquisition of European taxi app FreeNow, 175 million euros.
The sale of Hamburg-based FreeNow by current owners BMW and Mercedes-Benz is the latest step in a long withdrawal from “mobility services” such as “mobility services” and car rentals, which were strengthened 10 years ago by fears of pushing to own the automaker “peak cars.”
Founded in San Francisco in 2012, Lyft operates across the US and Canada, but according to CEO David Risher, it decided to diverge beyond North America after reporting its first year of net profit in 2024.
“The company was not ready yesterday,” Richer told the Financial Times for international expansion. “But we’re very financially strong now. We’ve put a lot of basics in place so we can build on top of it.”
Despite progress, the $4.555 billion company saw its share price fall by 20% this year. Uber’s stock, which has a market capitalization of $155 billion, has grown 17% since the beginning of January.
Risher said the stock market turnover following the Trump administration’s first three months forced many mergers and public lists to slow down — should not affect Lyft’s full-speed acquisition, which is expected to close later this year.
“We’re thinking about this in the long term,” he said. “In the long run, I think there’s a good reason to believe there are all kinds of transatlantic partnerships.”
Combining Lyft and Freinow creates businesses that serve more than 50 million riders a year, enhancing competition from Uber, dominated in the US and Europe.
With the acquisition, Lyft is following its longtime rivals by embracing the taxi industry, which was once considered Arch Nemesis of Silicon Valley Disrupters. Operating in 150 cities across Europe, Freinow is largely responsible for the majority of its revenue from 6.3 million passengers depicting traditional taxis, including London’s black cabs.
In recent years, Uber has added taxis to dozens of markets, including New York, Paris and Madrid, giving it a greater foothold in regions that significantly regulate the original ride-sharing model.
Lyft recently began applying for taxi operating licenses in some parts of the United States. Risher said FreeNow’s fleet management technology will boost Lyft’s efforts to diversify business and grow addressable markets. “We’re embracing a taxi-first business model (Freenow’s),” says Risher.
According to FreeNow’s chief Thomas Zimmermann, taxis in Europe tend to have slightly higher average fares than ride-sharing apps.
FreeNow, which broke since mid-last year, posted a total booking of over 1 billion euros in 2024, continuing to increase revenue across the market, Zimmermann said.
According to Sensor Tower, FreeNow has seen a decline in monthly active users of its UK and European apps during a period of Uber’s growing growth.
Recommended
Zimmermann said the use of the app doesn’t necessarily correlate with the number of vehicles booked, and it attracted attention, whether FreeNow has reduced promotions and incentives over the past year to increase profitability, or even if some competitors have made “very unreasonable spending” to seduce customers and drivers.
In 2019, BMW and Mercedes committed to co-investing more than 1 billion euros into a small number of mobility apps, including car sharing, parking and charging services. One such venture, Sharenow, was sold to Stellantis in 2022.
In a statement this week, BMW and Mercedes-Benz mobility will “continue to focus on core operations and transformational development to electrification, digitalization, AI and decarbonization,” after becoming “a pioneer in the development of digital mobility services.”
