Uber and Lyft Won't Be Satisfied Until This Happens

Written by John Peterson
Posted July 5, 2018 at 8:00PM

Uber and Lyft each came into prominence with their revolutionary ride-sharing services.

But both companies have been recently betting on other modes of transportation, too. And this is all with the goal of becoming the only service that people need to get around in cities.

This past Monday, Lyft struck a deal to buy the core parts of Motivate. Motivate is the parent company of Citi Bike in New York and several other bike-sharing programs around the U.S.

Now, why would a company that's primarily centered on automobile transportation jump into a smaller market and acquire a bike company?

Trust me, there's a bigger idea at work here...

Uber and Lyft have raised tens of billions of dollars to change the ways in which people travel in cars. But the future of urban transport doesn't revolve solely around automobiles.

Bike-sharing programs have been popular in cities around the world for years.

Even shared electric scooters have become a huge business with providers like Bird and Lime gaining popularity over recent months.

Lyft and Uber are well aware that you don't need to summon a driver to travel a mere 10 blocks.

Lyft's deal to acquire Motivate mirrors Uber's takeover of Jump. Jump is a dockless electric bike rental company in six American cities, which includes San Francisco and Chicago.

And now, both companies are experimenting with their own scooter-sharing programs, too.

But they have bigger ambitions than only filling in gaps in their transportation networks.

They want people to use their apps for navigating around cities — period.

Uber CEO Dara Khosrowshahi spelled out this idea earlier this year:

Whether it's taking a car, whether it's taking a pooled car, whether it's taking a bike, whether you should walk or even now we want to build out the capability for you to take a bus or subway. We want to be the A-to-B platform for transportation.

There are already apps like Citymapper that help commuters in figuring out the best way to navigate between two points in a city.

But Uber and Lyft have the advantage of actually running some of the transport networks that can be used to make those trips actually happen. And they're trying to make it so users will never have to leave their platforms.

One of the keys to making that dream a reality is to link their privately run businesses to public transit. And this is something that both companies are actively working on.

Uber struck a partnership with startup Masabi earlier this year to let its users buy public transit ticket through its app.

This means that if the fastest way across town involves a car and a train, Uber could earn money from both parts of the trip.

It isn't clear what Lyft's plans are with Motivate as of yet.

But with the acquisition, it buys relationships with eight U.S. cities that could prove helpful.

Many in Silicon Valley tout the benefits of the dockless bikes and scooters that Jump and Bird have to offer. But Motivate's bike docks are also useful real estate that provides central locations for bikes and scooters that tend to be around public transit hubs.

That could make it easier for users to take public transportation and then switch over to a bike. And this would be all while staying within the Lyft system.

Of course, both companies face plenty of barriers.

For one, although Lyft says it expects Motivate's contracts with cities to roll over with the acquisition, that's not guaranteed.

And although Uber has worked to rebrand the company as a friendly partner to local governments, many remain wary because of its past frictions with municipal regulators.

But Uber becoming what Khosrowshahi calls the "Amazon for transportation" could be incredibly lucrative.

And that could keep the fight for supremacy between Uber and Lyft alive for years.

That's all for now.

Until next time,

John Peterson
Pro Trader Today

Wireless Charging is Here!