Uber has announced that it has reached a deal to acquire JUMP Bikes, an electric bicycle service. This allows the ride-hailing firm to offers passengers in the United States an alternative to cars while consolidating the highly crowded bike-sharing sector. According to a spokesperson for the ride-hailing service around 100 employees of JUMP will join Uber. Terms of the agreement including the financial details were however not disclosed.
JUMP is headquartered in New York and offers a service where rides can rent bikes which are electric-powered through an online platform. The bicycles are dockless and therefore there is no specific place that they have to be returned to as riders can leave them at any convenient public bike rack. The position of the bikes is tracked through GPS and this eliminates the infrastructure cost which other bike-sharing firms incur. Uber already has a partnership with JUMP in the city of San Francisco and will now roll out the service across the globe.
“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,” said the chief executive officer of Uber, Dara Khosrowshahi.
Originally known as Social Bicycles JUMP was founded in 2010 and during its eight years of existence has sold bikes as well as operated its own fleet. Since it was started JUMP has raised from investors approximately $11 million.
For some time the bike-sharing craze was mostly an Asian phenomenon but has since caught on in the United States. Chinese bike-sharing startups such as Ofo and Mobike recently entered the U.S. market and are now taking on services that are sponsored by the likes of Ford Motor and Citigroup. The bike-sharing startups have recently become a target of acquisitions with Mobike for instance being acquired by Meituan Dianping, a Chinese internet company.
According industry experts more consolidation is to be expected in the U.S. especially since regulatory limits are being introduced on the number of bicycles that a bike-sharing company can be allowed to have in a particular city. There are also challenges with popularizing the services especially since Americans are not as accustomed to driving as they are to pedaling.
It is estimated that the bicycle-sharing market is growing annually at a rate of 20%. By 2020 this market is expected to be worth between 3.6 billion euros and 5.3 billion euros.