Since Dara Khosrowshahi took over as Uber CEO in August 2017, his main focus has been relentless innovation and investment deals aimed to broaden Uber’s platform, a platform that is now not just limited to cars.
Khosrowshahi hopes to transform Uber into a multi-modal company with investments in scooters, bikes and even flying taxis. This backs up Uber’s argument that it is not a transportation company, but rather a technology company.
Uber has partnered up with Getaround, a car-sharing company for car owners, to create Uber Rent. With Uber Rent, cars are available instantly and can be unlocked through the Uber app without the hassle of going through a rental company. Uber has also partnered with Masabi, a European company that provides mobile tickets for public transportation to help customers book and use tickets through the convenience of a single app.
For shorter distances, Uber is planning to focus on the use of electric scooters and bikes. In February, the company started offering bikes in their app and in April, Uber bought bike-sharing service Jump for 200 million. Jump has more than 12,000 bikes in eight cities and across six countries and Uber plans to expand it globally. Uber has also invested in the electric scooter company, Lime.
Bike-sharing is already available in San Francisco and Washington D.C. with plans to expand further. Dockless services are a new concept in the U.S. and brings up new questions such as where should they should be stationed and who is responsible for clean up?
Some states also regulate electric bikes like motorcycles which brings into question what type of insurance is required in the event of an accident, motorcycle insurance or rideshare insurance?
Financially, Uber expects to take a hit, at least initially. Uber will make less money for a bike that is rented per minute as opposed to a traditional Uber car ride. However, it hopes to offset this loss hoping more and more customers will use bike and scooter sharing for shorter distances. Bike sharing gives Uber customers more options and helps reduce congestion and wait times during peak hours while being more environmentally friendly.
At first, drivers were not very receptive of more competition to add to their already low wages, but as the ride-share company explained, drivers can also benefit from this move. Bicycles and scooters can reduce the demand for shorter rides and leave drivers with longer trips which translates to more money for the driver.