Uber Plans to Sell the Software That Powers its Ride-Hailing Network to Cities, Launching a California Pilot Next Month

resource from: Bloomberg   

Ride-hailing giant Uber Technologies Inc. is getting into the software as service (SaaS) business for the first time. The San Francisco-based company is making its robust ride-hailing software available to cities, beginning with public transit agencies in Marin County, just north of San Francisco. The program is called "Marin Connect." 

Marin Transit and the Transportation Authority of Marin are paying Uber a flat monthly subscription fee for access to the software that powers Uber's ride-hailing platform.

The pilot, which begins on July 1, includes four wheelchair-accessible passenger vans. Residents of Marin will be able to book rides on the vans directly from Uber's smartphone app. The app will match riders travelling in the same direction. 

Rides will cost $4 per mile, or $3 for those with disabilities. Unlike its ride-hailing business, Uber is not collecting any additional fees or commissions for the service outside of the monthly fee subscription fee. 

The pilot is scheduled to run for the next two years.

The two-year deal will cost the Marin County agencies $80,000, said Nancy Whelan to Bloomberg, the General Manager of Marin Transit. "We pilot a lot of things," Whelan said. "We try to stay nimble." Marin Transit has also worked with transportation tech companies Lyft Inc. and transportation startup Via in the past.

Uber will make public transit schedules and discounts available from the Uber app in Marin County. The fares collected will go directly to the Marin Transit Agency. 

A Marin Connect passenger van that will use Uber's software as part of the pilot program.

Uber is Sitting on a Vast Trove of City Mobility Data

Selling its logistics software gives Uber another revenue stream, which is especially helpful after its core ride-hailing business was severely impacted by the coronavirus pandemic. It could become a profitable part of Uber's business in the future.

Although Uber does not share any of its ridership data with third parties, the company has gathered insights into how traffic moves in the cities its serves across the globe, including identifying areas of peak ride-hailing demand. 

Selling some of this valuable logistics data as a software package to city transportation agencies might help them to better manage their mass-transit offerings and better meet the transportation needs of their residents. All of the data is completely anonymized and aggregated and contains no personal ridership information, an Uber spokesperson said.

 David Reich, Uber's head of transit, said the company was in discussions with "dozens" of regions across "multiple continents" and would announce more locations in 2020.

"This is not a one-off. This is a new product and a new business," said Reich. "Together we want to make car ownership a thing of the past."

Uber's effort to re-purpose its software for third parties and cities to use has been years in the making, Reich told Bloomberg. 

In Sept 2018, Uber signed an unprecedented agreement with Ford Motor Co. and rival Lyft to share data that can help reduce traffic in cities using the SharedStreets data platform. The platform is designed to make it easier for the private sector to work with cities around the world and leverage data to improve urban mobility and help make traffic move more efficiently.

While the pilot program in Marin County is relatively small frist step, major cities across the world looking to solve their transportation challenges might be willing to pay Uber a sizable monthly fee to help them better manage their mass transit services.

Uber is already talking with dozens of transit agencies around the world, Reich said.

resource from: Bloomberg

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.