Lyft may dump Citi Bikes in cost-cutting shakeup: report
Citi Bike owner Lyft is reportedly looking to offload its pricey fleet of bikes and scooters as part of a wider cost-cutting shakeup by new CEO David Risher.
Risher, who took over in April, wants to either sell Lyft’s fleet of 68,000 bikes and scooters or partner with an investor who can fund the division, people familiar with the matter told the Wall Street Journal.
Citi Bikes are available in several cities, with New Yorkers taking more than 114,000 rides a day in June.
But maintaining the fleet is expensive and seen as a distraction from the company’s core ride-share business, sources told the Journal.
In a blog post updated on Monday morning, Lyft said it “has received strong inbound interest in our bikes and scooters business, which is no surprise given that bikes, and particularly e-bikes, are growing more popular as ridership continues to break records.”
A Lyft spokesperson declined to comment.
Lyft purchased Citi Bike from Motivate in a nine-figure deal in 2018.
Lyft is looking to either sell its fleet of 68,000 bikes and scooters or partner with an investor who can fund the division in CEO David Risher’s latest effort to close the gap between Lyft and rival Uber. Stephen Yang
In 2022, Lyft reported $4.1 billion in revenue, but the company does not break out how much of the business comes from bikes and scooters.
The popular service enabled 52 million rides last year.
By comparison, Uber posted $8.6 billion in profits in 2022.
It’s been Risher’s mission to close the gap with Uber since taking charge April 21.
In June, standard Lyft rides were 12% cheaper than Uber’s, the outlet reported.
Lyft, whose share price is up nearly 16% in the past month, will release second-quarter earnings on Aug. 8.
Before being named CEO at the ride-share company, known for its eye-catching pink logo, Lyft upgraded its e-bike fleet in NYC with fancy LED screens and doubled the battery capacity.
The 1,500 new two-wheelers charge faster than the existing 5,000 e-bike fleet run by Lyft, and can travel up to 60 miles before losing battery.
If a buyer or investor were to step in, Lyft would want the two-wheelers to remain listed on its app so that riders won’t experience significant changes to the user interface, according to the Journal.
Risher, who rose to Lyft’s chief executive role in April, has already cut more than 1,000 workers and taken down over 250 job openings in an effort to cut costs. AP
Risher has since taken severe cost-cutting measures, handing pink slips to 1,100 employees.
Lyft also yanked more than 250 job openings, which would have incurred about $41 million to $47 million in costs related to severance and employee benefits in the second quarter, it said in an exchange filing.
The San Francisco-based company will also take additional costs related to stock-based compensations, which it said cannot be estimated at the time.
Source: New York Post
