Lyft Acquires FreeNow for $198M to Expand Ride-Hailing Services in Europe

Lyft (NASDAQ: LYFT) is entering the European ride-hailing market by acquiring FreeNow from BMW (ETR: BMWG) and Mercedes-Benz (OTC: MBGAF) for €175 million ($198.4 million). This move nearly doubles Lyft’s addressable market and gives it access to over 150 cities across nine European countries, including major hubs like London, Paris, Frankfurt, and Milan.

The acquisition comes as Lyft faces growing pressure from Uber (NYSE: UBER) in North America. By expanding abroad, Lyft aims to tap into a broader customer base and new revenue streams. According to CEO David Risher, the company is in a strong financial position and is making the move at “a good price and a great time.”

FreeNow offers a mix of transportation services, including taxis, e-scooters, and car-sharing. The company reported break-even status in 2024 following a 13% year-over-year revenue increase, driven largely by its taxi operations. The deal boosts Lyft’s potential market from 161 billion to over 300 billion personal vehicle trips per year.

Despite the opportunity, Lyft will face stiff competition from established European players like Uber and Estonia-based Bolt Technology, which already have significant market share. Additionally, European regulations are intensifying, requiring ride-hailing firms to provide driver benefits such as minimum wage guarantees and holiday pay—cost factors that could impact profitability.

FreeNow CEO Thomas Zimmermann highlighted the growth potential, noting that nearly half of Europe’s taxi industry remains offline. Bolt has already started adapting to regulatory demands by offering enhanced benefits to UK drivers.

The deal positions Lyft to compete more aggressively in Europe while diversifying its global presence in the mobility sector.