Lyft to buy FreeNow for €175m

Ridesharing US company to enter the European market

FreeNow will continue operating as it does today across nine countries; Ireland, the United Kingdom, Germany, Greece, Spain, Italy, Poland, France, and Austria.

US transport firm Lyft is buying mobility platform FreeNow from German automotive giants BMW and Mercedes-Benz for €175m to expand into the European ride-hailing market.

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 Lyft's 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.

FreeNow is the leading taxi platform in several major European cities, including Dublin, London, Athens, Berlin, Barcelona, Madrid, and Hamburg, with luxury vehicles making up a significant portion of its fleet. Taxis accounted for approximately 90% of FreeNow's Gross Bookings last year. 

The transaction is expected to close in the second half of this year. Lyft said the acquisition will almost double its addressable market to more than 300bn personal vehicle trips per year from about 161bn.

“We’re on an ambitious path to build the best, most customer-obsessed mobility platform in the world, and entering Europe is an important step in our growth journey,” said David Risher, CEO of Lyft. “We found the perfect partner in FreeNow and can learn a lot from the team."

FreeNow said in September it had achieved break-even status, on the back of a 13% year-on-year increase in 2024 revenue and its focus on taxi operations.

"Almost half of the taxi industry in Europe is still offline. So it's also where a lot of growth potential comes from," FreeNow CEO 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.

Lyft said there will be no immediate changes to FreeNow's customer experience, but over time, there would new benefits to drivers and passengers, saying drivers would see greater transparency around earnings and passengers would see more consistent pricing.

Additional reporting Reuters