Lyft buys taxi app from BMW and Mercedes to expand in EU

American ride-hailing platform Lyft is buying the taxi app FreeNow from German luxury car brands BMW and Mercedes-Benz. The Uber competitor is paying 175 million euros for this and wants to use it as a lever to enter Europe under its own name.

Lyft is primarily a ride-hailing platform that connects passengers with drivers through a mobile app. It offers various transportation options, including private rides, shared rides, bikes, and scooters.

Operational in 150 EU cities

The BMW and Mercedes joint venture is, first and foremost, a platform for cab services, but users can also turn to it for car rentals, e-bikes, scooters, and car sharing, among other services. Lyft is not directly active in the EU under its brand for ride-hailing services like it is in the US and Canada.

FreeNow announced last fall that it had become profitable and operates in more than 150 European cities, including Austria, Ireland, Great Britain, France, Germany, Greece, Italy, Poland, and Spain.

So, now the platform, launched in 2009 under the name MyTaxi, is coming into the hands of Lyft. Through the acquisition, Lyft is taking its first steps into Europe, nearly doubling its total addressable market to more than 300 billion personal vehicle trips annually.

Until now, Lyft’s international presence has been limited to bike and scooter programs via its subsidiary, Lyft Urban Solutions, including Santander Cycles in London, and some bike sharing systems in Barcelona, Madrid, and Clermont-Ferrand.

Uber’s biggest competitor in the US

Based in San Francisco, Uber’s competitor operates only in the United States and Canada. Uber is active in more than 70 countries worldwide. The deal is expected to close in the second half of the year.

According to Lyft, approximately 50% of European cab bookings still happen offline, but customers are hungry for more online bookings.

FreeNow is the leading cab platform in several major European cities, including Dublin, London, Athens, Berlin, Barcelona, Madrid, and Hamburg. Its fleet consists mainly of luxury vehicles.

Lyft was launched in the summer of 2012 as a service of the rideshare company Zimride before founders John Zimmer and Logan Green officially changed the company’s name to Lyft.

In March, Uber and Lyft drivers rallied at three California city halls, calling attention to a long-running lawsuit against the companies over thousands of wage-theft claims that could be worth billions of dollars.