I always enjoy covering updates from the world of the gig economy, mostly because it’s one of the few bright spots coming to us from internet technology when so many other things are… less nice. But Uber just released an announcement which has left me scratching my head. (Disclosure: I’m an Uber user and a huge supporter of the service.) In a puzzling shift of corporate focus, the ridesharing giant is now going to begin focusing more on bicycles and scooters as a way of helping people get around. (BBC)
Uber says it plans to focus more on its electric scooter and bike business, and less on cars, despite the fact it could hurt profits.
Boss Dara Khosrowshahi said that individual modes of transport were better suited to inner city travel. He also forecast users would make more frequent shorter journeys in future.
“During rush hour, it is very inefficient for a one-tonne hulk of metal to take one person 10 blocks,” he told the Financial Times.
“Short-term financially, maybe it’s not a win for us, but strategically long term we think that is exactly where we want to head.”
If we look at this story absent any context involving the company’s business model and history, what Khosrowshahi is saying all makes perfect sense for a number of reasons. More health-conscious people would probably rather take a bike than a car, particularly for short trips. And bikes (or scooters for those not quite so physically able to peddle) should be able to make it through congested urban areas faster than cars. Clearly, two-wheeled modes of transportation aren’t for everyone, but it should be a sizable enough market to be profitable if the usual considerations of operation in bad weather, theft, vandalism and other crimes can be overcome.
But even accepting all of that, there are a few problems with this which immediately jump to mind. First of all, Uber’s entire brand is built on ridesharing. This is not ridesharing. If anything, it’s a short-term rental business. And it’s a risky one at that. Several companies who have attempted to lease bicycles via an app have given up the ghost in short order. That includes a couple of startups in America as well as similar efforts in Asia which have imploded spectacularly.
Another issue in terms of Uber’s branding is the fact that they have traditionally been all about the gig economy. The service offers individuals a chance to work and earn money with their own car during the hours they choose. There is no driver for a bike or scooter. You’re driving yourself. Rather than creating more gig economy jobs, Uber is setting up a short-term bike rental service which will provide jobs for nobody.
They’re not discontinuing their core business and this is supposedly just an addition to their portfolio. But if this truly is where their “focus” is going to be, what does that say about the resources they will put into the automobile ride-hailing part of the company? Between bikes and self-driving cars, Uber seems to be increasingly turning away from the business model which brought them to fame and success in the first place.