Bike sharing: Uber makes splash with purchase of Jump, which provides stationless electric bicycle sharing in S.F.
Uber is pedaling full throttle into electric-bike rentals. The ride-hailing company on Monday said it is buying Jump Bikes, the first company to provide stationless bike sharing in San Francisco.
The price was not disclosed. TechCrunch, which had first reported talks between the two companies, reported that an unnamed source valued the deal at “closer to $200 million,” rather than the $100 million that was initially discussed.
For Uber, adding Jump furthers its goal of enabling city dwellers to not own cars, CEO Dara Khosrowshahi wrote in a blog post.
“We’re committed to bringing together multiple modes of transportation within the Uber app — so that you can choose 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,” he wrote. Buying Jump puts Uber into a new business model — one where it both owns and operates vehicles.
Jump founder and CEO Ryan Rzepecki said in an interview that a pilot program with Uber over the past several weeks showed “tons of alignment and synergy between Uber’s and our business.”
In January, Jump won San Francisco’s permission for an exclusive 18-month deal to offer its bright-red electric-assisted bikes in the city. It started with 250 e-bikes and could add another 250 after nine months with city approval. In February, Jump started a pilot program for San Franciscans to use Uber’s app to find and rent Jump’s bikes.
“Electric bikes are exciting because they can go longer distances at higher speeds, and handle different (terrains), such as San Francisco’s hills,” said Susan Shaheen, co-director of the UC Berkeley Transportation Sustainability Research Center. “The flexible, floating model (for bike returns) expands the geographic range of bike use. They’re creating more choices for customers.”
Stationless or dockless bikes
can be returned almost anywhere, as compared to rental bikes like the blue Ford GoBikes that must be returned to designated racks or stations. A San Francisco Municipal Transportation Agency memo on the city’s deal with Jump said its model of having users lock bikes to racks or poles with an integrated U-lock was superior to other stationless systems, in which riders may leave bikes blocking sidewalks.
In San Francisco, each Jump bike is used for six or seven trips a day, very high for the industry, Rzepecki said. The average trip length is 2.6 miles, showing that it replaces cars — including some Uber trips, he acknowledged. Most of Jump’s San Francisco rides were booked via its own app, rather than Uber’s.
“We’re providing a new commuting solution,” he said, noting that most bikes end up in the business district in the morning and in residential neighborhoods at night.
In fact, the program has been so successful that Jump asked the SFMTA to expand it more quickly than planned, he said. The SFMTA confirmed the conversations, but said it was sticking with the original agreement.
Jump charges $2 for half an hour. It offers an option called Boost for lower-income people, who pay $5 for an annual membership that allows one free hourly rental a day, after which the cost is 7 cents a minute. In the second year, Boost costs $5 a month. Ford GoBike has a similar program.
“It’s exciting that both Ford and Jump have programs to make sure bikes are accessible for folks on limited incomes,” said Chris Cassidy, a spokesman for the San Francisco Bicycle Coalition. “We are big fans of both. E-bikes are amazing; they open up the freedom of biking to so many people.”
Jump’s e-bikes are currently available in San Francisco and Washington, D.C. The company worked in 40 cities worldwide under a previous business model selling regular pedal bikes under government contracts.
The company has big expansion plans. Sacramento, Davis and Santa Cruz will be added within the next few months, as well as Providence, R.I. Also in the offing: Seattle, San Diego and New York.
Jump only enters cities that give it a permit to operate, Rzepecki said. That contrasts sharply with Uber’s expansion strategy, which has been to muscle into markets regardless of regulatory approvals.
“Some of our growth is constrained by how regulations are rolled out,” Rzepecki said, noting that some cities, including Oakland and Berkeley — both places Jump would like to operate — do not yet have a structure for e-bike rentals.
He’s also keen to branch into Europe. “Uber has boots on the ground in all these key European cities, so we will be able to go international a lot faster by working with them,” he said.
Jump is based in Brooklyn, N.Y., but Rzepecki moved to San Francisco in January and said he can foresee the company having dual headquarters on both coasts.
The company has about 25 support staff employees in San Francisco. Part of their job involves picking up “dead” e-bikes and bringing them to its charging stations near the CalTrain station.
But Jump wants to find alternative ways to charge the bikes, which have a range of about 40 miles and take two hours to charge. It will be installing more charging stations around the city.
Couriers with Uber Eats, the food-delivery arm of Uber, can get a free Jump rental if they bring in five dead bikes a day, he said. Regular riders will also be able to earn credits for bringing “bounty bikes” to charging stations, he said.
Electric scooters are another rental transit option that has recently exploded in popularity. “We are tracking the (scooter) market, as is Uber,” Rzepecki said. “Bikes are better for longer trips and faster speeds, but scooters are an emerging category. Uber’s general philosophy is, as many modes as possible.”
Rzepecki wrote in a blog post that Jump began talking with Uber a while ago, when the ridehailing company was in the throes of bad press and a leadership change. In the past, Uber has been criticized for the way it treated women in its company and using its software to thwart regulators from taking rides in its cars. But Rzepecki said “we could see the shift in the company” once Uber named its new CEO, Khosrowshahi, in August.
The SFMTA has gotten a lot of positive feedback from Jump riders who appreciate the boost of the electric-pedal assist and the convenience of parking wherever they would like, said spokesman Ben Jose. Negative comments have largely been about bikes parked at signposts rather than bike racks.
“It’s great that more people are seeing bicycles as a way to get around town,” he said. “The MTA has done a lot of work to make biking more safe and convenient.”