Uber has announced that it will be selling its ride-hailing software as a service product to California’s Marin County transportation providers. This is the company’s first sale of its software services to a third party.
The sale means the ride-hailing giants will partner with Transportation Authority of Marin (TAM) to manage its on-demand service for Marin County in the San Francisco Bay area.
TAM will pay Uber a subscription fee to use its ride-hailing software to facilitate requesting, matching and tracking of its high-occupancy vehicle fleet.
According to the General Manager of Marin Transit, Nancy Whelan the two-year deal will cost about $80,000. Following the partnership, Uber users in Marin County will see a new option called Marin Connect when they open their app.
The feature allows them to book a ride on the six-seater and wheelchair-accessible vans operated by Marin Transit. Fares are $4 per mile or $3 for Marin Access riders. The service will be launched on July 1st.
New Revenue for Uber
Following the outbreak of the coronavirus pandemic, Uber revenue took a big hit with ride-hailing services being decimated by shelter-in-place orders around the world.
Last month, the ride-hailing giants sacked about 25% of its workforce and shut several offices across the world to reduce operational costs.
Although, ride-hailing services have been picking up there is no clear timing as to when it will return to the pre-pandemic era with the virus still spreading.
However, the new SaaS partnership represents a potential new revenue stream for Uber, as the company will generate revenue by offering it as a subscription.
The head of Uber Transit, David Reich revealed the partnership is not a one-off thing, adding that the company intends to partner with other transit agencies in the future.
“This is not a one-off. This is a new product and a new business. Together we want to make car ownership a thing of the past.”
Potential Partnership with Lagos BRT
With Uber open to more partnership with public transit agencies, Lagos Bus Rapid Transit System could benefit from the technology that powers Uber’s global ride-hailing service.
This means that the government could easily partner with Uber, to use its app to allow Lagosians order for BRT buses from their smartphone without them have to invest millions building its own app.
Employing technology to reduce the long queues at BRT teminals will significant protect peoples health during the pandemic
The Uber app is proven hailing app that proven its success in different countries across the world including Nigeria. Also, it has a considerable number of Uber users in Lagos.
This translate to the fact that its integration to the BRT system will be smoother and faster compared to a new and unproven app that could be riddled by bugs. By getting the SaaS licence, the transport companies could automate their transit systems with having to bare a significant technology cost.
For years, Uber has been making efforts to re-purpose its software for third-party to use, according to Reich. Although the first deal is small, it marks the beginning of a reliable revenue stream for the company in the future.
Also, making the technology that powers its ride-hailing business available public transit systems in emerging economies like Nigeria could help hasten the digitization and growth of the sector.
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