Lyft to acquire European mobility app FREENOW for $197 million

SAN FRANCISCO & HAMBURG, Germany - Lyft, Inc. (NASDAQ:LYFT) has announced its acquisition of FREENOW, a European mobility app, from BMW Group and Mercedes-Benz Mobility for approximately $197 million in cash. The agreement, set to close in the second half of 2025, will see Lyft expand its operations to include 11 countries across Europe, the United States, and Canada.

FREENOW will retain its leadership team and continue its operations across nine European countries, including over 150 cities. The acquisition is expected to nearly double Lyft’s total addressable market, increase annualized Gross Bookings by approximately €1 billion, and diversify revenue streams.

David Risher, CEO of Lyft, commented on the acquisition, stating that partnering with FREENOW aligns with Lyft’s ambition to build a customer-centric mobility platform. FREENOW’s local expertise and strong relationships within the European taxi industry complement Lyft’s marketplace know-how, aiming to enhance the experience for drivers and riders.

FREENOW is a prominent taxi platform in key European cities and has a significant luxury vehicle fleet, with taxis comprising about 90% of its Gross Bookings in 2024. The collaboration is anticipated to serve over 50 million combined annual riders, with plans to improve product experiences and fleet management capabilities.

Thomas Zimmermann, CEO of FREENOW, expressed enthusiasm about joining forces with Lyft, emphasizing the shared commitment to the taxi industry and the potential to elevate the standard for mobility services across Europe.

The strategic move aligns with Lyft’s capital allocation strategy, following a record-breaking year in 2024 with high service levels, Gross Bookings, GAAP profitability, and cash flow generation. According to InvestingPro data, the company generated $766.27 million in levered free cash flow over the last twelve months, with analysts projecting continued earnings growth for 2025. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. While no immediate changes to FREENOW’s customer experience are expected, gradual integration and new benefits for drivers and riders are planned, including more transparent earnings for drivers and consistent pricing for riders.

Guggenheim Securities, LLC and Baker McKenzie are advising Lyft, while Lazard and DLA Piper are advising BMW Group and Mercedes-Benz Mobility. Lyft will further discuss the acquisition during its investor call in May when reporting Q1 2025 earnings.

The information in this article is based on a press release statement.

In other recent news, Lyft is reportedly in talks to acquire FreeNow, a taxi application owned by BMW and Mercedes, according to sources cited by Manager Magazin. This potential acquisition could expand Lyft’s global presence in the ridesharing market. Meanwhile, Lyft’s first-quarter revenue is anticipated to grow by 14.8% year-over-year, reaching $1.47 billion, although this estimate is slightly below consensus expectations. TD Cowen forecasts Lyft’s EBITDA to hit $92.1 million, aligning with company guidance but falling just short of the consensus of $92.5 million.

BofA Securities recently downgraded Lyft from Buy to Underperform, lowering the price target to $10.50 due to competitive pressures from autonomous vehicle technologies. Concerns were raised about Lyft’s near-term profitability, exacerbated by declining Average Transaction Value. Additionally, KeyBanc Capital Markets maintained a Sector Weight rating on Lyft, noting the involvement of activist investor Engine Capital, which holds a $50 million stake in the company. Engine Capital has suggested strategic reviews, including changes to Lyft’s board and capital allocation strategy. Despite these developments, BofA Securities had previously maintained a Buy rating with a $17.50 price target before the downgrade, reflecting a complex outlook for the company amid evolving industry dynamics.

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