Intangible Capital and Competition in Ride Sharing: The Case of Lyft-Motivate Merger

This study focuses on estimating the role of intangible capital on firms’ competitiveness. We use Lyft’s acquisition of Motivate, the biggest bike sharing company in the U.S. at the time, to evaluate the degree to which intangible capital affects the competition between Lyft and Uber. By acquiring Motivate, Lyft acquired a significant amount of consumer data and enhanced its brand salience through bikes’ presence on the streets. We interpret these features as a crucial role of intangible capital that Lyft effectively leveraged after the acquisition. We estimate the effect of the acquisition on Lyft’s ridership by employing trip-level ride sharing data from New York City and using a difference-in-difference-in-differences model. We find that the acquisition helped Lyft increase its ridership by around 6%.