UrbanTech E-Bike Startup Jump is Acquired by Uber

The Brief

  • Uber has acquired dockless electric bike sharing company Jump for an undisclosed amount. The startup had been working since Uber since February after integrating with the Uber app to allow San Fransisco residents to jump on the dockless bikes. 

  • Dockless bike sharing is a highly competitive space. Ofo closed $866M in a funding round last month. LimeBike raised $70M in February. 

  • Cities around the country are compiling data on the viability of dockless bike sharing programs. This could lead to better biking infrastructure like bike lanes or it could lead to a ban or limit on dockless bikes. 

Dockless bike shares are becoming increasingly popular because they are cheaper to operate than traditional bike shares and because they offer users the convenience of being able to dump their bike wherever they are going, instead of searching for a dock (and often finding that dock full of bikes). Dockless bike-sharing startup Jump, which was just acquired by Uber, operates the only dockless bike share in San Francisco and has a permit to operate only 250 bikes in the city.

The acquisition makes sense for Uber, which aims to own the full transportation stack for consumers. For users in urban areas, biking through congestion may often be faster and cheaper than taking a vehicle. As more cities recognize the importance of infrastructure for bikers, more and more people will begin to view biking as a viable transportation option. 

Since starting the pilot program a few months ago, Uber found that the average distance of a ride on a Jump bike is about 2.6 miles — which is not much different than how far customers travel on average for an Uber car ride, with each bike being used six to seven times a day.

In terms of cost, Jump is cheaper than everything but a dockless bike, and using Jump is faster than anything besides a car (and even then, not in congested urban areas).

Via  Asher M  - "Note the grey line, for a personally owned car. Free parking is pivotal here. If you pay $160 a month for parking at work, your cost per one way commute just went up $4 (20 working days per month). Price-wise, car ownership is not bikeshare's biggest rival. Free parking is."

Via Asher M - "Note the grey line, for a personally owned car. Free parking is pivotal here. If you pay $160 a month for parking at work, your cost per one way commute just went up $4 (20 working days per month). Price-wise, car ownership is not bikeshare's biggest rival. Free parking is."

The costs of e-bike sharing could fall even more if companies adopt "bring your own battery policies," which would reduce the need for rebalancing and recharging, while encouraging higher utilization and better-protected batteries. Here is the argument: 

Some might fret that carrying and charging a 2 lb battery is annoying. But it’s no more annoying than walking 5 minutes to a bus stop on both ends of a trip, or parking and locking your bike. Plenty of people already recharge their cell phone both at work and at home.Plus, the battery could have a unique ID that is transmitted to the vehicle, which serves to unlock it, replacing the need to scan a QR code to start a ride.
Walk to a dedicated ebike hub — or to the one you left outside your apartment — click in your battery and start your ride.
The daily user will appreciate the slight inconvenience of recharging the battery in return for great savings, of 50% or more. Limebike scooters appear to have a 23 mile range, based on their app — if the battery is entirely the green object near the handlebars in the picture below, that’s quite compact, and adequate to cover a day’s travel by scooter.

“Cities are craving solutions to downtown congestion,” LimeBike’s strategic developer Maggie Gendron in CityLab. “It may be a bike for one, a scooter for another, but we are trying to create opportunities for residents to commute or reconnect to their downtown.”

Dockless bike sharing companies have been controversial within cities. During the SXSW festival in Austin, a number of companies launched their bikes without permits, echoing the tactics of Uber, which pushed legal boundaries in efforts to expand. 

Late last year in China, shocking photos of "bike graveyard" were published on The Guardian, calling into question the long-term strategy of dockless bike sharing companies (China's third largest bike sharing company went bankrupt around the time these photos were published). 

Bike graveyards in China

Bike graveyards in China

Dockless scooter startups have risen to become another exciting mobility option for urban dwellers. These electric scooters fill a gap in the market for people who do not feel comfortable riding bikes (think of a woman wearing a dress to work trying to navigate on a bicycle).  Bird Scooters, the most widely known startup in this space, claims to have logged about half a million rides on more than a thousand scooters in less than six months of operating in parts of Los Angeles.

Limebike Scooters in DC

Limebike Scooters in DC

Jump also differs from its competitors because the bikes are electric and have pedal-assist technology, which makes commuting easier for people traveling long distances or for people in cities with hills. This technology has contriubted to the rise of e-bikes as an entry point for many into the world of biking. Over 400K e-bikes are projected to be sold in the United States this year, or over 2.5% of the total bikes sold in the country.

Startups like Gi Fly have raised the standard of technology, enabling subtle electric assistance for bikers when they need it. Real estate developers and corporate campuses are investing in e-bikes as amenities for their residents and their employees. 

All of these new options are great for those people who already bike to work. As more scooters and bike proliferate in the streets of major cities, the constituency for better infrastructure like bike lanes becomes even larger.