A Blog by Jonathan Low

 

Aug 27, 2018

Why Uber Is Switching Focus From Cars To Bikes and Scooters

One enterprise's diversification strategy is another' opportunity. Uber may be sensing that the growth in on-demand cars is peaking due to competition and government pushback.

It's goal now is to own its customers thru its electronic ecosystem rather than one mode of transportation. JL


Gwyn Topham reports in The Guardian:

The ride-hailing app will promote different modes of transport that can work better in congested inner cities, to keep Uber users on its platform. While the move would cost Uber in the short term, in the long term it would be better for cities, users and the company. “During rush-hour, it is very inefficient for a one-ton hulk of metal to take one person 10 blocks.” Diversifying would help shape user behaviour and also allow Uber to grab more of a “$6tn (£4.7tn) mobility market”, adding: “No one product is going to be serving that whole market.”
Uber is to switch its focus from taxis to electric bikes and scooters to grow its global business, its chief executive has said.
The ride-hailing app will promote different modes of transport that can work better in congested inner cities, to keep Uber users on its platform.
Dara Khosrowshahi told the Financial Times (paywall) that while the move would cost Uber in the short term, in the long term it would be better for cities, users and the company.
He said: “During rush-hour, it is very inefficient for a one-ton hulk of metal to take one person 10 blocks.”
Khosrowshahi said that diversifying would help shape user behaviour and also allow Uber to grab more of a “$6tn (£4.7tn) mobility market”, adding: “No one product is going to be serving that whole market.”
Uber has added e-bikes to its app in some US cities and spent about another $200m to buy the bike-sharing firm Jump earlier this year. It has also invested in the electric scooter firm Lime.
Khosrowshahi said investment would continue despite heavy losses at Uber, which lost $4.5bn in 2017. He told the FT: “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.”
An Uber spokesperson said there was “nothing to share” about possible UK expansion yet. Uber’s position remains uncertain in London, where it was granted a 15-month provisional licence on appeal this year after it was found not to be a “fit and proper” operator of private hire vehicles.
Although it has pledged to mend its ways, the company has continued to resist legal rulings giving employment rights to its drivers. London’s mayor, Sadiq Khan, has signalled his desire to cap the number of Uber drivers, which he blames for worsening congestion, and while cycling and scooters could be a better solution, the city would be keen to see how they work in tandem with its own extensive and loss-making cycle-hire scheme.
Uber said Berlin would be the first European city to host its Jump e-bikes, with others to follow. It operates in eight cities in the US, including New York.
Khosrowshahi admitted bikes would bring in less revenue than cars, but he believed they would promote longer-term engagement from Uber users. Investors would need to be prepared for short-term losses to achieve long-term goals, he said, with Uber’s flotation on the stock market – valuing the company at up to $70bn – anticipated soon.
Uber’s altered course comes as Chinese bike-sharing firms continue aggressive expansion. Although dockless schemes such as Mobike’s have encountered trouble making the basic model work in the UK, the companies are potential rivals in signing up users to their own apps and platforms for transport and other services.

1 comments:

Mike Rooney said...

Great article and i really like UBER service! Shop Now

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