Uber breaks into public sector with California deal

Uber has signed a deal to manage public transport in Marin County, in the San Francisco Bay area, with its software.

Residents in Marin, which has a population of 250,000, will be able to book rides on public minibuses through Uber’s app, which will match riders travelling in the same direction.

Rides will cost $4 per mile, or $3 for those with disabilities or other mobility issues, with the fee going directly to Marin Transit. Uber will not collect a commission, instead charging the authority a flat monthly rate for the next two years, totalling no more than $80,000 over that period.

While the contract is minor when set against Uber’s quarterly revenues of $3.5bn, it could lay the ground for Uber to sell its software as a service to public transport officials across the world.

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.

“Agencies have been approaching us for years now, trying to figure out ways that they can tap into the technology we’ve built within Uber,” he said. “This is the first step towards us being able to provide that to them.”

Uber already displays public transit options on its app in many locations around the world, but the deal in Marin is the first time it has directly run a government fleet.

In addition to the minibuses — which at first will carry only two passengers at a time, due to social distancing — the county will pay Uber up to an additional $70,000 per year to apply discount vouchers for standard Uber trips booked to and from transit stops, an arrangement similar to a deal Marin previously had in place with Lyft.

Uber had previously been notoriously aggressive in its dealings with public officials in the cities it wished to operate in. The company started up in many cities without approval, riling taxi drivers and provoking the ire of politicians.

The company went to great lengths to evade cities’ attempts to regulate them. Most famously, in 2017, the New York Times revealed Uber’s use of “Greyball” software, which tried to mask its activity from regulators.

Nevertheless, Marin officials said Uber’s reach made it an ideal partner. Previously, Marin Connect had suffered from low ridership, blamed in part on the need for riders to download a separate dedicated app for its use.

“People already have a gazillion apps on their phone,” said Nancy Whelan, general manager at Marin Transit. “And they may not want another one.”

Those without smartphones could call a customer service line to access the service in a more old-fashioned way, Ms Whelan added.

Marin’s other transit services — such as its network of full-sized buses — will not be managed by Uber.

Professor Susan Shaheen, from UC Berkeley’s Transportation Sustainability Research Center, said commercial deals such as this had the potential to increase public transport use, by reducing wait times and increasing overall efficiency.