Uber confirmed that cars will now play second fiddle to electric scooters and bicycles when it comes to getting around busy cities.
Uber is planning on pivoting the company’s business model with a whole new angle.
According to the Financial Times (via BBC), Uber chief Dara Khosrowshahi believes that despite it likely taking a financial hit, it will be better for the company to focus on electric scooter- and bicycle-sharing now rather than car transport in the future.
“During rush hour, it is very inefficient for a one-tonne hulk of metal to take one person 10 blocks,” he said.
“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.”
Over the past year, Uber has pushed its Jump scooter and bicycle service, which is now available across eight US cities and will soon be implemented in Berlin.
It has also begun making serious investments into other bike-sharing schemes, as seen last month when it and Alphabet led a group of investors pumping $335m into the electric scooter start-up Lime.
Tension in New York
Aside from the financial dip that would be expected with a focus on single-person vehicles, Uber admitted that its thousands of drivers could be affected in a negative way.
However, the company said it would expect drivers to make more money from passengers going on longer journeys in the long run.
The policy change will certainly interest Uber’s shareholders given that the company’s car business has continued to rake in the profits, while its bicycle- and scooter-sharing sector, as well as its food delivery business, have seen considerable losses.
Earlier this month, the company found itself caught up in a battle with New York City Council after the latter voted to freeze new ride-sharing vehicle licences for a year.
Following his vote, council member Ritchie Torres was quoted as saying: “No longer will the city of New York stand by idly while unfettered growth in the for-hire sector causes ever-worsening traffic congestion, ever-rising environmental degrading and ever-deepening human suffering.”
Updated, 11.07am, 27 August 2018: This article was updated to clarify that Uber was involved in an investment in Lime worth $335m, not $35m.