Uber set to shift business focus from cars to bikes

Urban dwellers and even some cities are realizing individual modes of transport are overall better suited to travelling in cities. Transportation network company Uber, whose rideshare and food delivery services are increasingly popular around the world, plans to focus more on its bike and electric scooter businesses and less on cars. By recommending these services the company hopes to improve it’s finances after big losses in recent years.

It would mark a major shift for the company but responds to the forecast that its users will make shorter trips in the future.

“During rush hour, it is very inefficient for a one-tonne hulk of metal to take one person 10 blocks,” Uber CEO Dara Khosrowshahi told the Financial Times. “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.”

Uber has invested in its bike industry recently with Jump electric bikes available in New York, Washington, D.C. and soon in Berlin.

While Uber makes less money from the equivalent trip made on a bike compared to the car, Khosrowshahi predicts since more customers would be using the service for short trips the loss in revenue would be offset. “We are willing to trade off short-term per-unit economics for long-term higher engagement,” he said.

Investments in its bike sharing and food delivery services has meant Uber’s losses have grown rapidly having lost US$4.5 billion in 2017. The improvement in its bike business is part of an effort to improve the companies finances ahead of Uber’s anticipated public listing.