Freenow acquired by Lyft for $200 million as U.S. ridesharing firm makes bold entry into the European taxi market

US ridesharing firm Lyft said Wednesday it had agreed to buy German taxi app Freenow, planting a flag in the European market.

Lyft said it had signed a deal to acquire Freenow from its current owners, German carmakers BMW and Mercedes-Benz, for 175 million euros ($199 million).

"Entering Europe is an important step in our growth journey," Lyft CEO David Risher said in a statement, hailing Freenow as the "perfect partner".

The acquisition marked Lyft's "most significant expansion outside North America", the group said.

The move would increase its gross annual bookings by one billion euros. In 2024, Lyft registered an equivalent sales figure of $4.3 billion.

Freenow is based in Germany but offers services in nine European countries, including France, Poland and the United Kingdom.

The service connects customers with ridesharing offers, as well as short-term car and scooter rentals, but 90 percent of Freenow's bookings were for taxis.

The taxi-hailing service would "continue to be the backbone of Freenow's business", the statement said.

Ridesharing firms, which rely on independent contractors to provide their services, have sometimes clashed with established taxi firms.

The tensions have proven a particularly sore point in Europe, where ridesharing services have faced greater scrutiny from officials than in the United States.

Freenow CEO Thomas Zimmermann said his group had "deep roots in the taxi industry" and would work together with drivers.

"We stand with the industry -- not above it -- and remain proud partners of the community," Zimmermann said.

This story was originally featured on Fortune.com