Uber is widely known for its car service. Bot now Uber plans on putting their focus more on bikes than cars. This is done for people who would want to travel shorter distances. This will initially take a huge toll on the profits. But Uber decided not on a whim, rather keeping the future in mind. This will bring a good profit in the future.
“To commute alone in the city, it is better to use a single seated vehicle,” Said Dara Khosrowshahi, CEO of Uber.
Contradictory to this statement, he informed there are other individual modes of transportations. According to him, in the future people will travel a short distance more. Initially, it will not bring the expected profit for Uber. But in the long run, this will direct Uber in its desired path. Despite this, he came clear that this will bring loss in the short term, even though the company suffered a $4.5 billion worth of losses.
Khosrowshahi informed that the investors needed to be aware that to gain long term profit, short term losses need to incur. To achieve such profit for the ride-sharing app, a focus shift to intercity travel via single-seated vehicles are necessary.
“During Rush Hour it is really inefficient for a big vehicle like or even a motorbike to intercity travel.” Said Mr.Khosrowshahi. “We’re able to shape behavior in a way that’s a win for the user. It’s a win for the city. 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.” He further told.
Uber initially added e-bikes to its app back in February and procured the bike-sharing company Jump. This $200 million deal took place in April. Jump bikes are available in 8 major US cities and to be launched in Berlin.
Mr. Khosrowshahi has plans on launching what he likes to call “Urban Mobility Platform.” He made deals with companies like Lime and Masabi. Masabi is a London based app providing tickets for public transport. Lime is an electric scooter company.
Now, this shift will snatch away potential customers from car drivers, but in the long, they’ll get better offers and more longer rides in the future. This will also bring in more customers for Uber that in the long run cover up for all the losses.