The Freenow takeover by Lyft is a declaration of bankruptcy for the car companies

By selling Freenow to Lyft, the German auto industry has lost a key mobility partner. It could have easily dominated the mobility market in the EU.

With the acquisition of Freenow by the US company Lyft for €175 million, a new player is entering the European mobility scene. This move not only marks a geographical expansion for Lyft, but could also usher in profound changes in the German and European mobility landscape.​ At the same time, it represents a management failure on the part of the German manufacturers.

Freenow, formerly known as Mytaxi, has grown into a major player in the European mobility sector since its founding in 2009. With a presence in over 150 cities and offering services ranging from traditional taxis to e-scooters and car sharing, Freenow has built a broad user base. The acquisition by Lyft now brings a breath of fresh air to this established system.

For Lyft, this move represents a near-doubling of its addressable market, from 161 billion to over 300 billion personal vehicle rides annually. This opens up new growth prospects for the company, particularly in a market previously dominated by Uber and the Estonian provider Bolt. The fact that almost half of the European taxi market still operates offline offers additional potential for digital platforms like Lyft.

But Lyft's entry into the European market is not just a business decision; it also has far-reaching implications for the German mobility scene. The acquisition signals the end of an era in which German automakers like BMW and Mercedes-Benz attempted to establish their own mobility platforms. The idea was to view mobility as a holistic product that functions independently of the car. The "Daimler" brand would have transformed from a pure manufacturer to a mobility service provider.

Freenow had every opportunity to assert itself against the competition. Thanks to the car companies' high profits in the years before the crisis, there was plenty of money available. What was lacking, however, was the willingness to take on long-term investments to bring the company to the top of Europe. The old motto applied: If it doesn't generate any money after three years, it won't be supported any longer.

Freenow was perceived by the corporations as a burden, not an opportunity. With the sale of Freenow, they are now withdrawing from this segment, raising questions about the future role of German companies in digital mobility.

It's clear that companies need to diversify their portfolios. Sales figures won't increase at the rate we've been used to over the past decade. The Chinese market is growing slowly, while the Indian market is just beginning to develop. In addition, autonomous vehicles will significantly change the last-mile micromobility market.

For users, the integration of Freenow into the Lyft ecosystem could bring both opportunities and challenges. On the one hand, new technologies and improved services could be introduced that enhance the user experience. On the other hand, there is a risk that local characteristics and needs will be lost in a global system. Freenow's current strong focus on taxi operations, which accounted for approximately 90 percent of bookings in 2024, could be complemented or even displaced by a stronger focus on rental cars and other services.

Lyft's acquisition of Freenow should not be underestimated. It highlights the growing influence of international technology companies on local markets and raises questions about the future of urban mobility. Within the EU, only Bolt remains as a major competitor in the market. Uber and Lyft will divide the rest. With this sale, Germany has completely withdrawn from the battle for urban mobility.

Don Dahlmann has been a journalist for over 25 years and has worked in the automotive industry for over ten. Every Monday, you can read his column "Torque," which takes a critical look at the mobility industry.