Lyft is buying rival mobility platform FreeNow, the largest taxi operator in Ireland, from German automotive giants BMW and Mercedes-Benz for €175 million to expand into the European ride-hailing market, the US company said on Wednesday.
Under pressure from dominant ride-hailing rival Uber Technologies in its home North American market, Lyft has been seeking new avenues to grow its business.
The acquisition of FreeNow will nearly double its potential market and open doors to major European cities such as London, Frankfurt, Paris and Milan, where the German firm offers services ranging from traditional taxi to e-scooter rentals and car-sharing options.
It will also see the company take on FreeNow’s fleet of more than 12,000 drivers in the Republic, where it is by far the largest taxi operator.
Free Now Ireland, which is headquartered in Dublin, generated revenues of more than €46.1 million in 2023, according to accounts filed last year, and paid a €7 million dividend to its parent company in Germany.
The Irish entity had after-tax profits of more than €4.7 million, bringing accumulated profits for the business to almost €1.4 million from a €3.3 million accumulated loss in 2022.
In a report attached to the accounts, the directors said Free Now Ireland saw a 20 per cent jump in turnover in 2023 after focusing on “restructuring its internal cost structure”.
FreeNow operates in more than 150 cities across nine European countries. The company said in September it had achieved break-even status, on the back of a 13 per cent year-on-year increase in 2024 revenue and its focus on taxi operations.
Lyft, meanwhile, is entering the European market at “a good price and more importantly, a great time,” its chief executive, David Risher told Reuters, adding the company was in a financially strong position to expand.
Lyft said the acquisition will almost double its addressable market to more than 300 billion personal vehicle trips per year from about 161 billion.
“Almost half of the taxi industry in Europe is still offline. So it’s also where a lot of growth potential comes from,” FreeNow chief executive Thomas Zimmermann said in an interview.
But its efforts to grow in Europe by capturing more of the offline market will face competition from Uber as well as Estonia’s Bolt Technology, as both companies have a strong hold over the European market.
European regulations are also pushing ride-hailing firms to enhance driver benefits, such as minimum wage guarantees and holiday pay, while also increasing pressure on pricing structures to ensure fair compensation.
Bolt recently introduced benefits such as holiday pay and minimum wage guarantees for UK drivers in response to regulatory pressures. – Reuters
