Uber is planning to shift from cars to electric bicycles for shorter journeys as part of its long-term strategy, according to the ride-hailing firm’s CEO. Dara Khosrowshahi told the Financial Times that smaller, individual modes of transport are better suited to inner-city travel.
“During rush hour, it is very inefficient for a one-tonne hulk of metal to take one person ten blocks,” he told the newspaper. “We’re able to shape behaviour in a way that’s a win for the user. 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.”
Khosrowshahi admitted that Uber makes less money from a bike ride than from the same journey in a car, but said he expected that impact to be offset if customers used the app for more journeys more regularly, an effect the company has already seen with cyclists in San Francisco.
“We are willing to trade off short-term per-unit economics for long-term higher engagement,” said Khosrowshahi. “I’ve found in my career that engagement over the long term wins wars and sometimes it’s worth it to lose battles in order to win wars.”
Uber first added e-bikes to its app in February and acquired the bike-sharing company Jump for $200 million in April.
“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?” said Khosrowshahi. “The second impression after the conversation is, oh, I get a longer ride where I can make more money? Sign me up.”
Uber has found that when traffic congestion is at its worst – which is from 8am to 6pm every weekday – people in San Francisco prefer to take a Jump share e-bike rather than an Uber car. Uber has owned Jump since April.
Uber policy researcher Santosh Rao has written that speed is the reason for the preference. "During congested times, mass transit or bike share are often faster than taking an Uber." (However, he added that such usage depends on the weather: "when it’s raining, most people will prefer Uber or public transit over bike share or walking.")
And far from being worried that bikes are taking business away from cars, Uber's transportation policy and research head Andrew Salzberg welcome it. He told CNN: "This is having a positive impact on the things cities care about, notably congestion and reducing carbon."
"[Cities which] are serious about moving people more efficiently and fighting congestion should be leaning into the idea of allowing modes like bikes and scooters to be prevalent," concluded Salzberg.