Uber's Future Is Full of Bikes and Scooters
The world's biggest ride-hailing company is doubling down on what it sees as the future of its business. Uber CEO Dara Khosrowshahi is investing heavily in bike and scooter share systems throughout the world and thinks that its better suited for inner city travel.
"During rush hour, it is very inefficient for a one-tonne hulk of metal to take one person 10 blocks," Khosrowshahi told the Financial Times.
The leader of the $62 billion company initiated the purchase of Jump Bikes in April and invested $335 million in Lime, a scooter and bike sharing company. It's part of Uber's last mile strategy where it wants to focus on rides, usually from people connecting from public transportation, where it's a short enough distance for someone to walk, but still long enough where a person would consider ordering a car.
"There's a $6 trillion mobility market, and no one product is going to be serving that whole market," Khosrowshahi said.
Uber's Jump Bikes are already in eight US cities including New York and Washington, DC, and will soon be available in Berlin, Germany. You can rent the bikes through the Uber app, and the company is working to incorporate Lime scooters into its offerings as well.
Although it may not be a large revenue driver right away, bike and scooter sharing is a smart long-term move, according to Khosrowshahi, even for a company that has had trouble turning a profit. The company said that its seeing a huge increase in bike rides and that riders usually prefer bikes over cars if the option is available.
"We're able to shape behavior in a way that's a win for the user," he said. "It's a win for the city. Short-term financially, maybe it's not a win for us, but strategically, long term we think that is exactly where we want to head."
Still, the company faces roadblocks for its car-sharing business. It was recently halted from expanding in New York City. Scooter and bike sharing companies are also seeing pushback from communities who want to implement regulations before the devices are dropped into cities, sometimes overnight.
Drivers shouldn't be too worried about the increased focus on other forms of transportation — in fact, Khosrowshahi says it may even benefit them.
"When I've spoken to our driver partners about it, the first impression was, why are you bringing in a bike to compete against me?" he said. "The second impression after the conversation is, 'Oh, I get a longer ride where I can make more money? Sign me up.' "