The boss of ride-sharing firm Uber has revealed that in future the business will focus on looking to provide electric bikes and scooters to its customers rather than cars for short journeys.
The company acknowledges that its decision may impact profits, but in an interview with the Financial Times, CEO Dara Khosrowshahi highlighted that bikes and scooters are better-suited to trips in city centres.
In April this year, Uber said it was buying San Francisco-based e-bike rental start-up Jump, now operating in eight cities in the United States and will shortly undertake its first overseas launch in the German capital, Berlin.
Last month, Uber joined in a $335 million venture capital funding round for dockless bike and electric scooter sharing business, Lime, which is active in around 50 cities in the United States and several locations in Europe including Paris and Zurich.
Khosrowshahi, who predicts that people will increasingly use bikes and scooters for short, urban trips, said: "During rush hour, it is very inefficient for a one-tonne hulk of metal to take one person 10 blocks.
"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."
According to Khosrowshahi, while Uber’s revenue per trip is less on a bike or scooter ride than it would be in a car, he believes the greater number of trips made using those modes would compensate.
"We are willing to trade off short-term per-unit economics for long-term higher engagement," he explained.
Meanwhile, drivers would stand to earn more than they do at present through focusing on longer journeys.
The company is expected to launch an IPO, but investment in ventures such as bike-sharing and its Uber Eats food delivery operation have seen losses jump to $4.5 billion in its latest financial year.
At the same time, measures taken or proposed in cities such as New York and London to limit the number of licences granted for vehicles operating within ride-hailing businesses as they seek to tackle congestion are likely to have an impact on Uber’s core offer.
Speaking earlier this month as the company announced its third-quarter results, Khosrowshahi said: "We're deliberately investing in the future of our platform: big bets like Uber Eats, congestion and environmentally friendly modes of transport like Express Pool, e-bikes and scooters, emerging businesses like Freight, and high-potential markets in the Middle East and India where we are cementing our leadership position."
When Uber announced in April that it had agreed to buy Jump, Khosrowshahi, who took up his position last year after a sexual harassment scandal saw the departure of a number of key executives, said that a trial of the dockless e-bike scheme in San Francisco was proving successful.
“Our hometown pilot is off to a very strong start, with riders enjoying a convenient and environmentally friendly way to cruise up and down our trademark hills,” he said.
"Jump’s CEO Ryan Rzepecki is an impressive entrepreneur who has spent the better part of a decade bringing bike-sharing to life across the globe.”
He added: "We're committed to bringing together multiple modes of transportation within the Uber app – so that you can choose the fastest or most affordable way to get where you're going, whether that's in an Uber, on a bike, on the subway, or more."
Rzepecki said at the time: “When we first began talking to Uber they were going through an extremely difficult time, with negative headlines each week and a massive change in leadership.
“We expected to find a toxic work environment and a broken culture. Instead, everyone we met was smart, passionate, and genuinely wanted to help our team succeed.
“Through our collaboration, we realised that we shared Uber’s vision of multi-modal mobility and had the same goal of decreasing car ownership.
“Even more importantly, we could see the shift in the company once Dara was named CEO as he began leading with humility and in a way that we felt reflected our values.
“It soon became clear that with such strong synergies and alignment on mission, Jump could better accomplish its goals if it were part of Uber.
“We’re excited to begin our next chapter and to play a significant part in the transition of Uber to a multi-modal platform,” he added.
“Combining Jump’s track record of product innovation and city partnerships with Uber’s scale, operational excellence, and resources will allow us to make a global impact faster than if we were to pursue our vision alone.”
Born in Scotland, Simon moved to London aged seven and now lives in the Oxfordshire Cotswolds with his miniature schnauzer, Elodie. He fell in love with cycling one Saturday morning in 1994 while living in Italy when Milan-San Remo went past his front door. A daily cycle commuter in London back before riding to work started to boom, he's been news editor at road.cc since 2009. Handily for work, he speaks French and Italian. He doesn't get to ride his Colnago as often as he'd like, and freely admits he's much more adept at cooking than fettling with bikes.