US ride-hailing service Lyft has reportedly acquired startup Halo Cars, which focuses on rooftop advertising. The news was confirmed by Lyft on Friday following media reports of the acquisition a day earlier. Lyft like other ride-haling services is looking into newer avenues in search of profitability and the acquisition of Halo Cars is another step towards.
Although ride-haling services have gained immense popularity over the past few years, most are still running into losses. This has seen most ride-hailing companies like Uber and Lyft pumping money into other side businesses with the aim of registering profits.
Lyft tries to lift itself
Lyft confirmed that it has purchased digital car-top advertiser Halo Cars although it didn't disclose the buyout amount. The acquisition is being seen by many analysts as a brilliant move by the ride-hailing company, who has been struggling for quite some time and is desperately searching for profitability in its business. Halo is likely to aid Lyft in its pursuit to profitability.
Halo Cars was founded in 2018 and has operations in quite a few big US cities such as New York and Chicago. However, it is a relatively new and small company, which makes more sense for Lyft to buy the company, as it is also focusing on acquiring the team that is likely to also join its media division. Digital car-top advertising is one of the easier avenues for both traditional taxis and ride-hailing companies to generate revenues.
Struggle continues for ride-hailing services
Ride-hailing services have gained immense prominence and popularity over the past few years and have been giving traditional taxis a run for their money. However, despite that most ride-haling companies like Lyft and its larger rival Uber have been struggling to become profitable ventures. This has seen them invest money in side businesses in pursuit of profitability.
Uber too has been testing car-top advertising through a partnership with a startup called Cargo. With Lyft now acquiring Halo Cars, it might once again raise competition between the two companies. That said, Lyft is quite small in size to Uber both in terms of presence and the number of users. Earlier this month, Lyft had said that its active rider customer base grew in the fourth quarter grew from 22.3 million to 22.9 million in the previous quarter. Uber on the other hand has an active rider customer base of 111 million globally.