Uber buys electric bicycle rental company Jump Bikes
This is the first acquisition under Uber’s new CEO Dara Dara Khosrowshahi.tech Updated: Apr 10, 2018 16:38 IST
Uber Technologies Inc. is leaping into the bike-rental industry with the purchase of Jump Bikes, as Chief Executive Officer Dara Khosrowshahi seeks out new growth areas with his first acquisition.
The ride-hailing giant agreed to pay more than $100 million in cash and stock to buy the electric-bicycle provider, a person familiar with the matter said, asking not to be identified because the figure isn’t public. Technology news site TechCrunch first reported acquisition talks. Uber declined to disclose the terms of the deal, which the companies unveiled in a joint statement Monday.
With the acquisition of Jump, Uber will now be in the business of owning and operating fleets of electric bikes. Dockless conveyances — electric scooters, traditional bicycles, electric bikes and mopeds — are becoming more prominent in San Francisco and other US cities. In China, the bike-sharing industry drew thousands of bicycles to cities, flooding sidewalks, raising questions about whether restrictions might be needed.
Jump sees itself as a more government-friendly option. The company already has approval to operate in San Francisco. Jump and Uber struck a partnership that integrated Jump’s $2-a-ride service into Uber’s mobile application earlier this year.
“It’s an interesting evolution of our business model,” Khosrowshahi said in a phone interview. Jump, which started operating as Social Bicycles Inc., got its start selling bicycles to cities, including Portland and Phoenix. This year, it began renting a fleet of 250 electric bikes directly to consumers in San Francisco.
Ryan Rzepecki, Jump’s CEO, will report directly to Khosrowshahi and continue to run the bike company. It plans to retain the Jump brand. “Our average trip length in San Francisco is 2.6 miles,” Rzepecki said. “This is more than first and last mile. This is the entire trip — the ability to have a new very fast point to point transportation option.”
Khosrowshahi said that Uber plans to integrate independent bike companies into Uber’s app as well. “In the end we will want as many bikes as possible for the urban consumer,” Khosrowshahi said.
Khosrowshahi didn’t address what the acquisition would mean for Uber’s multibillion-dollar losses. “We’ll invest as much as we need to. We’re not really thinking about this in the context of a path to profitability or an IPO. We have to solve for consumers first,” he said.