Uber tries to make bikes, scooters into profitable business
Uber announced a number of changes to its bike and scooter business Thursday as the company faces pressure to become profitable.
Uber will give its rentable bikes and scooters more prominence in its app next month in an attempt to increase ridership. In 2020, it will introduce swappable battery kiosks in cities, which will allow Uber riders, drivers and couriers to exchange batteries on Jump-branded vehicles.
Like all bike and scooter companies, Uber faces significant costs to charge and maintain its fleet. The company has increased rental prices this year. It’s expensive to hire workers to travel around cities replacing dead batteries, so having riders swap batteries could reduce how many people Uber needs to pay.
“We’re focused on ensuring this becomes an economically viable business over the long term,” Rachel Holt, who leads new mobility at Uber, told CNN Business ahead of the event. “We’ve seen tremendous improvements over the course of this year in that regard and a ton of efforts underway that will continue to improve that over next year.”
Uber made the announcements at an event in San Francisco, which included updates on its ridesharing, food delivery, freight hauling businesses and some incremental safety features.
Uber has been the subject of a slew of negative headlines lately, including big losses and rider safety issues. It also faces increased pressure to be profitable since its initial public offering in May. It reported record losses in its most recent financial quarter, and its stock price has dropped roughly 30% since going public.
The company has gone through two rounds of layoffs, with the bike and scooter team impacted. Uber’s Jump electric bikes, which propel a rider forward depending on how hard they pedal, has been a pioneer in the space; competitors have followed to offer their own models. Uber acquired Jump in April 2018.
But Uber has pulled its electric bikes out of five markets this year, including San Diego, Dallas and Atlanta. The company described the exits as being decided on a case-by-case basis as it aims to make bikes and scooters a sustainable part of the transportation ecosystem. It will launch scooters in San Francisco next month after receiving government approval this week. Holt said Uber remains committed to bikes and scooters.
“We’re definitely in rapid expansion mode, not contraction mode,” she said. “We believe this is part of the future of how people are going to get around. That is what makes us bullish.”
As part of the strategy, Holt said Uber would pivot bikes and scooters away from cities with low ridership to other markets.
Uber’s increased promotion of bikes and scooters fits its goal to be the transportation company for everyone, no matter how they’re traveling. Previously, Uber users had to toggle to a different screen in the app to see bikes and scooters. Now they’ll see the small vehicles displayed in the map on Uber’s home screen.
CEO Dara Khosrowshahi has talked of becoming the “Amazon of transportation,” alluding to how Amazon started as a bookstore before expanding to selling nearly everything. This summer, Uber experimented with promoting bikes and scooters prominently on the map on its app’s home screen in two cities, and was pleased with the results, according to Holt.
“Choice is at the crux of our approach and strategy and what we’re seeing — again it’s early days — when you give consumers choice they engage more across our entire platform,” Holt said.
Uber also said Thursday that its bikes have been ridden 1 million times in Paris since launching five months ago.