Uber electric bikes and scooters may replace cars for short-term journeys. The ride-hailing app is planning to shift its focus from cars to bikes as part of its long-term strategy to drive growth.
Uber Electric Bikes Vs. Uber Cars
According to media reports, Uber CEO Dara Khosrowshahi told that individual mode journeys were better for commutation for inner-city travel. Dara who replaced Travis Kalanick as Uber CEO also highlighted how the company’s plan might cause another financial loss in the short term.
While justifying the plan for shifting focus on Uber electric bikes the CEO told that it was inefficient for cars to move in rush hours. While talking to Financial Times, he further elaborated that the move might not be a win for the company in the short term but in a long run, it will take the business where it wants to head.
Uber Electric Bikes to Diversify Growth
It may appear that shifting focus from cars to Uber electric bikes can bring a short-term financial loss for the ride-hailing app, but the plan is more likely to expand growth. The company has made an investment worth of $200m in Jump electric bikes which are already available in almost 8 US cities. The company has also struck a deal with an electric scooter company Lime and a London based e-ticketing company Masabi. As part of its portfolio diversification, the ride-hailing app is also offering food delivery and freight brokerage services.
Impact on Uber’s Financial Revenue
It might be too early to predict the impact of Uber’s focus shift from cars to bikes on the result of its fiscal revenue. The company CEO admits that it is likely to lose in short-term as fairs for uber electric bikes will be lesser than cars. At the same times, he is also hopeful that once more people start riding Uber electric bikes, the company will start seeing an increase in the revenue.
Well, such a move may also affect the Uber drivers who are working with the ride-hailing app for a living.
But, it is not possible to generalize that Uber will look to electric bikes section as its primary product. The company’s plan to expands its portfolio to a new segment may also bring down the costs that it faces for lack of car ownership. Further, investing in electric scooter businesses is also less costly than investing in a car manufacturing endeavor. If Uber electric bikes initiative becomes successful, the company might use it to finance the car ownership.