Lyft logo is seen in this illustration taken June 27, 2022.
Dado Ruvic | Reuters
U.S. ride-hailing firm Lyft on Wednesday announced that it’s buying European taxi app FreeNow in a 175 million euro ($199 million) deal.
The company said that the acquisition — Lyft’s first in Europe — is expected to close in the second half of 2025, and that, once combined, the two companies will serve over 50 million combined annual users.
Founded in 2009 as myTaxi, FreeNow is a ride-hailing platform headquartered in Hamburg, Germany. The company has been jointly owned by German automotive giants BMW and Mercedes-Benz since 2019.
The app is available in over 150 cities across nine countries, including Ireland, the U.K., Germany and France. Beyond traditional taxi and ride-hailing services, FreeNow also offers other mobility options including e-scooters, e-mopeds and e-bikes.
The startup is earnings-positive on the basis of Earnings Before Interest, Debt and Amortization, generating gross bookings over 1 billion euros in 2024, according to a company fact sheet.
‘Now is the time’
Acquiring FreeNow will give Lyft a route to expand into the highly competitive European ride-hailing market, where it will come up against the likes of Uber, Estonia’s Bolt and Israel’s Gett.
Lyft CEO David Risher told CNBC that the company is only now entering Europe because it saw an opportunity to expand after steadily improving the service in North America.
Noting that Thursday will mark his two-year anniversary as Lyft CEO, Risher said: “When I started, unfortunately, we were losing share, we were losing money. We weren’t doing so great for riders or drivers.”
“Now, we pick you up about a minute faster, driver cancelation is down to less than 5%, drivers are making billions of dollars on the platform. And our Canada operation has doubled this year over last year.”
He added: “So, looking at the strong service levels, looking at the fact that internationally, within Canada, we’re doing quite well. Now we said, ‘You know what, now is the time?”
Lyft’s closest domestic rival, Uber, has a lengthy head start on the firm, having first launched in the U.K. back in 2012. It has since been beset by a series of regulatory issues.
London’s transport regulators tried to ban Uber two times over safety concerns. The company was eventually awarded a fresh license to continue operating in the city in 2022.
Read More: Lyft to buy taxi app FreeNow for $200 million to expand into Europe