Bike or car? It’s all business for Uber

Uber Technologies is about more than just ride-hailing. That’s a key part of the pitch it is making to investors as the company prepares for an initial public offering this year. In fact, some of Uber’s new lines of business may actively dissuade people from calling one of its cars.

Rachel Holt, head of the New Mobility division, says customers who use Uber’s scooters and bikes hire 10 per cent fewer cars through the app. And in at least one market on certain days — the core of Sacramento, California — more people took Uber’s electric bikes than used its cars.

Uber says cannibalisation of its ride-hailing business is part of its master plan. Growth is slowing in Uber’s main business — meaning that as an IPO looms, its other ventures are becoming more important.

As well as investments in areas such as food delivery and trucking, Uber is betting big on bikes and scooters. In April, it purchased Jump Bikes for US$200 million ($297m). The company has also considered buying scooter front-runners Lime and Bird Rides, holding talks with each, people familiar with the matter have said, but Uber so far hasn’t done a deal.

Instead, it has been cranking out its own product — producing nearly 1000 Jump-branded electric bikes a day. This year, the company has a US$1 billion budget for scooters, bikes and other mobility initiatives, Holt says.

Uber’s long-term goal is to let users book all transit within its app. Other companies, including competitor Lyft, are also working to integrate public transit options.

“It’s part of them subscribing to a vision that in a few years there will be one or two apps through which we access all of our transportation modes,” says Arun Sundararajan, a professor at New York University’s business school.

That could mean, for example, using one app to co-ordinate taking a bike to the train and then a car to the office, instead of just taking a car. Uber’s diversification promises to be costly: it lost US$1.1b in the third quarter of last year alone. It’s now “building mind share and changing behaviours,” Sundararajan says, “and that is frequently accompanied by losing money.”