Uber announced today that it has acquired Jump, which provides dockless, electric bike sharing services. While much of the talk surrounding the deal has been about adding a new mode of transport for people trying to get around town, it seems like this move could also be a vertically integrated shot in the arm for the company’s growing Uber Eats platform.
Food delivery has been wildly successful for Uber. The service was available in 200 cities around the world last year, achieving profitability in 45 of those markets. Uber is expanding to another 100 cities around the world over the next year.
Adding Jump to the Eats arsenal would make sense in densely populated cities like San Francisco (where Jump already is) and NY, where traffic can slow car-driven deliveries down. Using an e-bike would allow Uber Eats drivers to bypass congestion for faster deliveries. Since Jump’s bikes have electric assist, those making deliveries could do so without breaking (as much of) a sweat.
A direct Jump/Eats relationship would also give Uber more integration throughout its food delivery stack. Uber Eats already allows delivery drivers to use their own bicycles for delivery — why not give them the option to use the Jump bike instead (for a small fee, of course)? As noted, an e-bike could allow drivers to make more deliveries for less “work” to ideally make more money, without the up-front cost of buying what is an expensive mode of transportation.
Uber has already shown its interest in owning more of its food delivery biz. Earlier this year it acquired David Chang’s Ando, a virtual delivery-only restaurant. So it’s not hard to imaging Uber pushing consumers to order from its own virtual restaurant and have that meal delivered on an Uber e-bike.
Having its own fleet of electric bikes in big cities could also help Uber fend off competition from GrubHub and DoorDash, which recently raised $535 million for its own restaurant delivery services. And such a move is not without precedent. Meituan, a Chinese food delivery company, recently purchased the Shanghai bike-sharing startup Mobike.
But potential Jump/Uber integration would also presumably be a win for consumers and restaurants. Getting food delivered faster means less chance of a lukewarm meal arriving at your door. Obviously hotter food is more enjoyable, and it also helps protects a restaurant’s brand from a bad eating experience.
We’ll see if Uber “jumps” (ed. note: sorry) at these opportunities, but this acquisition looks like a smart play, and I wouldn’t be surprised to see others following suit.