Uber agrees to buy Jump Bikes, company to run Providence bike-share program

DARA KHOSROWSHAHI is CEO of Uber. Uber recently acquired Jump Bikes, the company Providence has contracted to establish a bike-share program in the city. / BLOOMBERG FILE PHOTO/SIMON DAWSON
DARA KHOSROWSHAHI is CEO of Uber. Uber recently acquired Jump Bikes, the company Providence has contracted to establish a bike-share program in the city. / BLOOMBERG FILE PHOTO/SIMON DAWSON

NEW YORK – Uber Technologies Inc. is leaping into the bike-rental industry with the purchase of Jump Bikes, the company that the city of Providence has contracted to run a city bike-share program, as Uber CEO Dara Khosrowshahi seeks out new growth areas with his first acquisition.

The ride-hailing giant agreed to pay more than $100 million in cash and stock to buy the electric-bicycle provider, a person familiar with the matter said, asking not to be identified because the figure isn’t public. Technology news site TechCrunch first reported acquisition talks. Uber declined to disclose the terms of the deal, which the companies unveiled in a joint statement Monday.

With the acquisition of Jump, Uber will now be in the business of owning and operating fleets of electric bikes. Dockless conveyances — electric scooters, traditional bicycles, electric bikes and mopeds — are becoming more prominent in San Francisco and other U.S. cities. In China, the bike-sharing industry drew thousands of bicycles to cities, flooding sidewalks, raising questions about whether restrictions might be needed.

The Providence bike-share program is expected to debut this summer. Its fleet will consist of 400 electric-assist bikes and 40 bike-share hubs.

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Jump sees itself as a more government-friendly option. The company already has approval to operate in San Francisco. Jump and Uber struck a partnership that integrated Jump’s $2-a-ride service into Uber’s mobile application earlier this year.

“It’s an interesting evolution of our business model,” Khosrowshahi said in a phone interview. Jump, which started operating as Social Bicycles Inc., got its start selling bicycles to cities, including Portland and Phoenix. This year, it began renting a fleet of 250 electric bikes directly to consumers in San Francisco.

Ryan Rzepecki, Jump’s CEO, will report directly to Khosrowshahi and continue to run the bike company. It plans to retain the Jump brand. “Our average trip length in San Francisco is 2.6 miles,” Rzepecki said. “This is more than first and last mile. This is the entire trip — the ability to have a new very fast point to point transportation option.”

Khosrowshahi said that Uber plans to integrate independent bike companies into Uber’s app as well. “In the end we will want as many bikes as possible for the urban consumer,” Khosrowshahi said.

Khosrowshahi didn’t address what the acquisition would mean for Uber’s multibillion-dollar losses. “We’ll invest as much as we need to. We’re not really thinking about this in the context of a path to profitability or an IPO. We have to solve for consumers first,” he said.

Eric Newcomer is a reporter for Bloomberg News. PBN contributed to this article.

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