Uber JUMP Bikes: Opportunity or Evil Empire?

JUMP Bikes

JUMP Bikes

One year in, San Francisco’s The New Wheel offers insight into the impact share e-bikes are having on their business

Words by Peter Koch

We’ve written here before about dockless bike share programs, and the risks they pose to bike retailers and the entire culture of bike ownership, as more and more dockless shares come online across the U.S.

But the stakes were raised even more this April, when ride-hailing company Uber acquired JUMP Bikes (for $200M), a dockless e-bike sharing system that was running pilot programs in Washington, DC and San Francisco. Now, a massive tech company with global reach (not to mention one that’s proven itself cavalier, and hell-bent on dominating local markets, regardless of efforts by government regulators) was wading into the dockless bike share wars, and threatening to increase the speed at which they proliferate across the country. Since its acquisition, JUMP has launched e-bike shares in Santa Cruz, Sacramento, Chicago, Austin, New York City, Denver, Providence, Santa Monica, Seattle and San Diego, constituting more than 4,000 e-bikes across those markets.

JUMP Bikes

JUMP Bikes

And, while at first blush it seemed to constitute a pure threat to IBDs in those markets, it also occurred to us that the most effective way for retailers to sell e-bikes is to go on test rides. And the very existence of widespread share e-bikes—like JUMP and its chief competitor, Lyft Bikes—probably offers thousands of people who otherwise might not have it the opportunity to "test ride" e-bikes. With that in mind, we wondered, could they be an effective sales pitch for people in those markets to invest in their own personal e-bikes?

To find out, we reached out to Brett Thurber, co-owner of San Francisco’s The New Wheel e-bike shop, to see what his experience has been since the program launched there in January of this year. Here are his takeaways:

The Good News
“So far, the expansion of electric bike share has been very beneficial to us,” Thurber says. “All of the sudden, we have lots of bikes publicly available and cheap to rent, so people can try them out with no strings attached.” Their business for the year is up around 40%, and while they can't attribute it directly to JUMP, they know anecdotally that many people become interested in e-bikes after riding a JUMP bike. “They find it so useful and fun, that they come in to purchase one of their own.

The New Wheel cofounders Brett Thurber (left) and Karen Weiner.

The New Wheel cofounders Brett Thurber (left) and Karen Weiner.

“The other benefit we see is that e-bike share potentially eliminates the lowest end of the market for e-bikes,” he says, which New Wheel doesn’t operate in. “Why would you buy a low-quality e-bike that isn’t great to ride and may cause you lots of headaches, when you can rent an e-bike and have someone else take care of it?” Thurber believes that by allowing people to trial e-bikes versus buying them, they’re less likely to make the common mistake of buying a low-quality e-bike and then feeling obligated to stick with that bad investment just because they put money down. “I think those people might be more apt to upgrade to a higher-end e-bike down the road, which is great for us.”

The Reality Check
Of course, Thurber’s not a doe-eyed optimist who blindly believes it’ll always be good for business. “I can see where this goes where it could become a real challenge for us,” he says. “Uber is a market destroyer in the extreme that’s proven willing to lose staggering sums of money on its way to dominating markets.” He believes that, if Uber has its way, JUMP will want to put tens of thousands of e-bikes in every city (versus hundreds right now) which would make renting an e-bike potentially so convenient as to make owning one obsolete. Right now, he says, there are too few share e-bikes in San Francisco to meet the demand, which means they’re not a reliable form of personal transportation. As a result, “people come to us for a reliable vehicle that they can own. But if that were to change, we could be in trouble.”

The Upshot
“At the end of the day, e-bike share has only benefitted us. We’ve always focused on higher-value, more vehicular-quality e-bikes, so we don’t lose out if the lower part of the market goes away. But seeing what modern capitalism has done to small business makes me reluctant to celebrate Uber’s arrival to the bike industry.”