Ride-hailing company Uber Technologies Inc on 9 April decided to buy electric bicycle service JUMP Bikes, as per media reports.
This would allow Uber to offer U.S. passengers an alternative to cars and would enable it to consolidate the crowded bike-sharing industry.
What does the deal have in store?
JUMP bikes in January integrated its service with Uber’s smartphone app in San Francisco so that users could find one of JUMP’s bright red bicycles by opening the Uber app. Uber has no intention to take over the JUMP mobile application.
“We’re excited to begin our next chapter and to play a significant part in the transition of Uber to a multi-modal platform” and help “shift millions of trips from cars to bikes,”
said JUMP CEO, Ryan Rzepecki.
By turning their focus on electric bikes, Uber is following the footsteps of its rivals such as China’s Didi Chuxing. Uber has at times lagged rivals in certain markets because it has been limited to private car-hailing.
About 100 JUMP employees are to join Uber, an Uber spokeswoman said. However, the terms of the deal were not disclosed.
Uber Chief Executive Officer Dara Khosrowshahi said that this development is in confirmation with Uber’s goal of offering,
“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.”
About JUMP
JUMP is a dockless electric bike service that has its services in San Francisco and Washington. Based in New York, JUMP started in 2010 as Social Bicycles, evolving over the past eight years from selling bikes to operating its own fleets. JUMP bikes are unlocked and locked using a smartphone app.
Because they are dockless, they can be left on any public bike rack, eliminating a lot of the infrastructure cost other bike-share companies incur, and their location is tracked via GPS. The company has raised about $11 million from investors.
Other players in the market
JUMP is part of the bike-sharing craze that made its way to the United States after sweeping through China. Chinese startups Mobike and Ofo have recently entered the United States. They are facing competition from bike-share services sponsored by Citigroup Inc and Ford Motor Co and California-based startups such as LimeBike.
India’s homegrown cab-hailing startup, Ola had also launched its bike-sharing arm, Ola Pedal in a number of university campuses in India. Zoomcar had announced its entry into this arena with Zoomcar PEDL in mid-October launching its services in select locations in several cities.Other bicycle sharing startups include Yulu founded by the co-founder of InMobi, Amit Gupta who had recently quit the latter firm.
Southeast Asian company Grab, to which Uber recently sold its business in that area, has also invested in OBike.
However, the number of startups through acquisitions, including Didi’s deal with Bluegogo and China internet company Meituan Dianping’s purchase of Mobike.
Experts are of the opinion that more consolidation will follow in the United States, particularly as bike-sharing companies face regulatory limits on the number of bikes allowed in cities and difficulties getting Americans accustomed to pedaling instead of driving.
Also Read: Common shareholder SoftBank calls for merger between Uber, Ola in India
