4 Ways Uber Wants to Expand Its Services

Under CEO Dara Khosrowshahi, the company wants to partner with cities and be more than just a rideshare.
by | April 11, 2018
Uber CEO Dara Khosrowshahi in January (Matthias Balk/TNS)

For years, Uber has fought with cities and resisted regulations by insisting that it was a technology company, not a transportation company.

But the company’s top officials on Wednesday signaled a major shift in approach: Uber wants better relationships with cities, and it is most definitely focusing on transportation.

“We are starting a strategy where we are going to double down on Uber becoming more than just a ridesharing company. … Our view is we are going to be the predominant Point A to Point B transportation platform,” said Jahan Khanna, Uber’s head of product for mobility, at an event in Washington, D.C. “In order to be successful in doing this, we can only do it in a spirit of true partnership with cities, a spirit of true partnership with transit agencies.”

Dara Khosrowshahi, who took over as Uber’s CEO last August, said the company was making many moves to offer more services to residents in metro regions across the globe.

“We have to have a solution for car ownership, and we have to work together to make sure that living in a city, living in an urban destination, doesn’t require you to own a car,” he said.

Khosrowshahi highlighted several moves that Uber is making to reach that goal, including the purchase of a dockless bikeshare company, the launch of a carshare service, the integration of transit planning and payment in the Uber app and better data sharing with city governments and transit agencies.

The Uber CEO joined Washington, D.C., Mayor Muriel Bowser at the event. Together, they announced that the company would open a new service center for Uber drivers in an often-overlooked part of the city across the Anacostia River from the U.S. Capitol. But the company also used it as an opportunity to burnish its reputation with local officials as it tries to weather a host of recent controversies.

Khosrowshahi, the former head of Expedia, came to Uber last year after several scandals forced his predecessor to step aside. But even under new leadership, the company is facing criticism from state and local officials for many unrelated events. For example:

  • An Uber autonomous vehicle killed a pedestrian in Tempe, Ariz., last month. It’s the first time a driverless car has killed a pedestrian. But the incident raised questions not only about the capabilities of autonomous vehicles, but also about Uber’s safety culture.
  • Cities are increasingly turning to taxes on Uber and other ride-hailing services to shore up their financially strapped transit systems. In fact, Bowser wants to raise Washington’s taxes on Uber as part of a regional effort to better fund the Metro subway and bus system.
  • The Seattle city council is currently considering raising the base fare for Uber and Lyft rides, as a way to boost driver pay. Uber responded with a petition drive that quickly garnered thousands of signatures opposing the move.
  • Several recent studies suggest that Uber and its competitors create more congestion, rather than reducing it, in cities. If true, it would undercut many cities’ traffic and environmental goals, and it may be one reason for widespread drops in transit ridership.

Khosrowshahi could not completely avoid those topics Wednesday. He didn’t offer any more details about the Tempe crash, but he insisted that autonomous vehicles would be necessary to reduce car usage and to make streets safer. He also seemed open to the idea of some additional taxes being used to improve city transit systems, but he pushed back against certain taxes, especially on multiple-rider services like UberPool, which ferries up to three different passengers at once.

The overarching theme from Khosrowshahi and the other executives is that they want to make it easier for customers to avoid buying cars by using Uber services instead. Here's what that entails in the near future:

 

1. The company is getting into bike-sharing. 

Earlier this week, Uber announced it would directly compete in the dockless bikeshare market by buying Jump, a provider that uses electrically assisted bikes. Uber is already integrating the bikesharing service in San Francisco and Washington, D.C., and it plans to expand it much further.

“Having e-bikes, on a dockless basis, available in cities in a responsible way is going to allow more and more people to move around in cities,” Khosrowshahi said, “but move around in ways that are efficient, that don’t cause traffic, that don’t cause issues with the environment.”

Another company official said Uber was excited to take the Jump service “to every major city in the world.”

That could be a big change for cities and states that are not prepared for dockless services. They were virtually unheard of in U.S. cities a year ago, but now they are rapidly expanding in cities such as Dallas, Seattle, San Francisco and Washington, D.C. The introduction of dockless bikes – and, more recently, dockless scooters – raises questions about how many of the devices should be allowed in each city, where they should be allowed to park, who should clean up illegally parked bikes and whether cities should tax the services.

The fact that Jump uses e-bikes adds another wrinkle to all of that, because, in many states, electrically powered bikes are regulated as motorcycles or motor vehicles. That means they require license, registration and insurance, even if state agencies aren't equipped to handle them.

But Uber’s ownership of Jump could make it a more popular option at a time when several dockless companies are clawing for market share. Other Jump competitors, like Ofo and LimeBike, are, like Uber, heavily backed by venture capital firms.

Uber’s purchase of Jump is also significant because it means the company will actually own transportation assets for the first time, rather than connecting third-party contractors who own their own cars.

 

2. It wants to integrate with city transit systems. 

Uber announced Wednesday that it would be partnering with Masabi, a software company that works with transit companies, to integrate transit planning and fare payment in the Uber app. Uber’s Khanna cautioned that the process was still in its early stages.

“This represents the beginning of a sustained investment on behalf of Uber into making mass transit and public transit real first-class services,” Khanna said.

“Uber riders will not only be able to see transit routes, see transit information, but you’ll also be able to use the Uber app as a ticket onto these transit agencies themselves. And you’ll be able to pay for the services in your Uber app,” he added.

Masabi’s software allows transit agencies to partner with a number of different third-party apps. It has worked with transit systems in Boston, Los Angeles and New York, along with cities around the world.

Again, though, Uber would join a crowded field of vendors hoping to help riders pay their fares electronically. Moovel, for example, is a subsidiary of Daimler that is already integrating transit fare payment, bike sharing and car sharing (Daimler also owns the car-sharing service car2go.) The Transit app allows travelers in 125 cities to plan trips using buses, subway, bikeshare (docked and dockless), carsharing and Uber. It also works with Masabi to let users make payments and receive mobile tickets. Other cities and transit agencies have been working on their own systems, as well.

Even with all the attention, though, it can be very expensive and time-consuming for transit agencies to broadcast real-time travel information and to accept the new forms of payment.

 

3. You'll be able to use Uber to rent out your car or rent somebody else's. 

Uber is getting set to take on car-sharing competitors and traditional rental cars with its plans to integrate GetAround into its app. GetAround is a peer-to-peer carsharing company, which means it lets car owners rent out their vehicles to other people. GetAround installs electronic locks in the vehicles, so that renters can access the cars with their smartphones.

 

4. Uber will share more of its data with cities.

Uber announced it would be participating in Shared Streets, an effort by the National Association of City Transportation Officials that lets cities get a better grasp of how their streets and curb spaces are being used by taxis, ridesharing companies and transit.

The company also said it was expanding its Uber Movement traffic data site to include 12 new cities globally. It now offers detailed information on Boston, San Francisco, Washington, D.C., Pittsburgh and Cincinnati, plus cities in other countries.