Uber is set to buy into an electric bike-sharing venture, by acquiring Jump Bikes, in its first such deal under Uber's CEO Dara Khosrowshahi.
Jump Bikes will provide its pedal-assist electric bikes on-demand to customers through the Uber app in many U.S. cities this year.
Jump Bikes was founded in 2010, and has raised $24 million in venture funding before this deal. Investors include Menlo Ventures.
New York-based Jump Bikes brought dockless bike sharing to the U.S. and now Uber is acquiring the bike-sharing company Jump Bikes for an undisclosed sum, both companies announced Monday.
The deal marks Uber's first acquisition since it announced Dara Khosrowshahi as it's CEO and sold a stake to SoftBank with the aim of going public next year.
Jump's neon coloured red bikes can be found by users, paid for and unlocked all using the customers smartphone. When the riders are finished with their bike, they are able to park them anywhere that's convenient, providing it's legal to do so. All this without the use of kiosks.
Bike-sharing technology is far simpler to control than self-driving cars. This after Uber had to suspend its autonomous vehicle testing after a fatal accident in Tempe, Arizona.
Uber has already trialed the partnership with Jump in San Francisco and offered the pedal-assist electric bikes to the county .
Jump CEO and founder Ryan Rzepecki has said his company will now operate as a wholly owned subsidiary with all it's 100 employees now joining Uber. Rzepecki himself will report directly to Khosrowshahi.
The companies are also exploring ways to make e-bikes useful to Uber Eats couriers.
While bike-sharing has been extremely popular in China and in parts of Europe, its future in the U.S. is still to be decided. Venture capitalists have been willingly investing heavily into bike sharing companies in the U.S. and hoping the success will happen as it has overseas.
Uber's new CEO, Dara Khosrowshahi, replaced the outgoing Travis Kalanick. On Wednesday, Nov. 22nd it was revealed that a Uber hack had occurred on 57 million customers and drivers. Under the control of Kalanick, the company had hidden the hack for well over a year and paid a $100,000 ransom.
Last week, one of the biggest bike-sharing platforms in China, Mobike, was bought by Meituan Dianping, the nation's largest provider of on-demand online services, for $2.7 billion.
Prior to its acquisition by Uber, Jump Bikes had raised $24 million in venture funding from investors. These companies including Menlo Ventures, SineWave Ventures and SOSV.
Jump, was founded in 2010, it was the first company to offer dockless bike sharing in the U.S. One rival that followed Jump into the market, LimeBike, has raised $132 million since it was established in January 2017.
U.S. start-ups such as LimeBike, Spin and Zagster will now face competition not just from the Uber-owned Jump, but also the Chinese competitors arriving to the U.S. market including Mobike and Ofo.
Read more: cnbc.com