Ride hailing company Uber is set to add a significant number of electric bikes and scooters to its existing fleet of those transportation modes.
In an interview to the Financial Times, the CEO of the company Dara Khosrowshahi said that the company is bringing in a shift in strategy away from cars and is gearing up to focus more on the two wheelers which would be used more by the company as a means of transportation within a city and for shorter, inner-city rides. This is a part of their long term strategy, Khosrowshahi said.
According to Khosrowshahi, this change in strategy that reprioritizes on the two wheelers would be useful for the urban areas because “it is very inefficient for a one-ton hulk of metal to take one person 10 blocks” when there is rush hour and people need to reach shorter destinations on time. “We’re able to shape behavior in a way that’s a win for the user,” he said. “It’s a win for the city.”
The company however is more likely to take a hit in the short term, conceded Khosrowshahi, which would be over and above the already incurred loss of $4.5 billion which it had made last year. there would be decreased profits for the company during the initial phase of the refocused strategy because compared to cars, the per mile rates of scooters and bikes would be much lower.
“Short-term financially, maybe it’s not a win for us,” he explained, “but strategically long term we think that is exactly where we want to head.”
And for drivers of Uber who are already complaining of low wages in virtually every market where it operates, the strategic shift by the company would have a further impact on them, Khosrowshahi also acknowledged. But he argued in the interview that ultimately in the long run, the Uber drivers would be hired for the longer and financially more lucrative longer routes and rides and where the drivers would have to face much less congested traffic thereby increasing fuel efficiency and hence their profits.
“When I’ve spoken to our driver partners about it, the first impression was, why are you bringing in a bike to compete against me?” he said. “The second impression after the conversation is, oh, I get a longer ride where I can make more money? Sign me up.”
Electric bikes were first used by Uber in February this year and the company bought out the bike sharing firm Jump in April of this year. Jump currently operates in eight cities throughout the U.S. the company also plans to expand the two wheelers to markets outside of the US as well at later stage.
(Adapted from Frotune.com)