Now Uber Wants to Revolutionize E-Bike Sharing in the US, Buys E-Bike Sharing Startup--Jump


(Harry) #1

Uber announced it is buying Jump and this comes to no surprise. The reason being that Uber is seeking ways to improve its revenues without having to constantly subsidize its services.

Jump Bikes is a San Francisco based electric bike sharing company that operates 250 bikes and since it started out in February, has reached 1,000 rides a day, which is an impressive 4 rides per bike per day.

While this is impressive for a new start-up, what is more, impressive is that it is a capital expenditure-based company and jot just an app operator. This means that Jump needs to invest in more bikes to increase its reach, and this means that Uber has to spend its money to make this happen.

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Jumps business model revolves around a dockless scooter and bike that complements Uber's long ride service. Imagine this; you get an UberPool or Express Pool to a location that is still quite a walk. Or perhaps you took an UberX but need to get around in the city. Jump provides this end of the ride solution. You just grab a bike or trike and ride off to your destination.

The Jump solution is not unique, there are many such providers around, and ne of them is Santa Monica based Bird, which has completed 500,000 trips in the last half a year. Uber has to contend with the competition, but with billions in its reserves, they could go on a blitz to take over the local market.

The price of a bike varies on time of day and saturation of demand, but in essence, they vary between $5 to %13 for a basic ride that would be from the Mission to the Financial District.

The market potential in the US for bikeshare has not even taken off properly, and while Uber battles public transport, regulation, and Lyft, by adding this end of the service addition, could definitely improve their market status.

The potential that some rides will transfer from POOL or X rides is high, take for instance an average 15-minute drive. When factoring in weather conditions and traffic, he option to take an electric ride for some people is extremely attractive:

Let's look at that Mission to FD trip.

  • Public Transport is between $2 and $2.50
  • Express Pool is under $5, but you need to walk to and from the car locations.
  • Uber Pool is around $6, but you get to sit with other passengers.
  • UberX will cost about $13, but then there's traffic
  • A Jump Bike is $2 and takes under 30 minutes.

Bike riding, even electric bike riding is not everyone's passion, but when factoring in price and traffic issues, quite a lot of passengers will use this service. I expect that winter and the heat of summer will be an issue for a lot, but in most other weather conditions it should work fine.

Students are the best targeted market, as well as pensioners too. So, if Uber targets these two markets, they could initially increase their potential market share by 20%. It is also feasible that Uber will link Express POOL shuttle stops with Jump bike docking stations and increase their availability.

Bottom line:

Uber has to factor in capex and consider investing in bikes, maintenance, repair, and salvage. Whether this will prove to be a profitable gamble will be known in time.


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(Steve Mann) #2

Uber is leaving Asia and growing in the US. Just what Softbank wants and just what Uber needs. Uber was so ignorant of the US market during 2017 that it allowed Lyft to double in size. I think 2018 will see a new Uber image and scope emerge.


(Andrew Martin) #3

Uber is confusing, on the one hand it doent want to invest in capex, on the other hand it is investing Justin that now. Maybe they have started to realize that company without any tangible assets is really non-existant. Sort of like a fintech company where profits come from fees. However, with Uber, there are no profits, only losses, so maybe investing in something tangible will give it some substance. The other alternative is to invest in real-estate and buy up all the offices they work out of, the McDonalds platform, where they passively invest in profit making through real-estate. It doesn’t matter which route they take, they still have to price their services to make profit and stop subsidizing driver income to make the cheap service attractive.