Here’s Why Owning A Bike-share Service Makes Sense For Uber

Source: Recode, Johana Bhuiyan @JMBooyah
Photo: Jump Bikes

Losing out on those first- and last-mile trips will start to add up.

Jump Bikes launched in San Francisco in January with 250 electric bikes. By February, Jump had launched a pilot service in partnership with Uber. By the end of February, its first full month of operation, the company said each of its bikes saw up to four trips per day at an average distance of 2.6 miles.

That’s as many as 1,000 trips a day or 28,000 trips that month. In other words, those are 28,000 trips that Uber could have gotten a bigger piece of.

So it came as little surprise when Uber announced on Monday it was acquiring Jump. The company would not disclose the terms of the transaction.

The introduction of dockless electric scooters and bikes posed a clear threat to one aspect of Uber’s ride-hail business: Shorter trips.

In Santa Monica, for example, Uber is fending off scooter-sharing company Bird. The company, founded by former Uber executive Travis VanderZanden, completed 500,000 trips between September 2017 and March 2018. Bird is also now available in San Francisco.

Losing out on trips shorter than three miles may not seem like much on the surface, but it certainly adds up. In San Francisco, a three-mile Uber ride between the Financial District and the Mission could cost between $5 and $13, at the time of publication. (The price varies based on things like time of day, demand and other market dynamics.)

In China, where dockless bike-sharing first took off, there were more bike-share rides between 2013 and 2017 than there were ride-share rides in the U.S. in that time. So there’s a big potential market for Uber to crack with e-bikes.

The company is already fending against both public transit and competitors like Lyft; operating a service that could make it easier and cheaper to take shorter rides could mitigate a new threat to Uber’s business.

Under the right circumstances — like weather, time, availability and price — taking a $2 bike ride may be the optimal option for passengers. That’s especially true of electric bikes that can be dropped off anywhere because it offers the convenience of a door-to-door service that does not require much more physical exertion for a typically much cheaper price.

Johana Bhuiyan is the senior transportation editor at Recode and can be reached at johana@recode.net or on Signal, Confide, WeChat or Telegram at 516-233-8877. You can also find her on Twitter at @JmBooyah.

https://www.recode.net/2018/4/9/17215962/uber-jump-dockless-bike-sharing-acquisition