Uber expands higher-margin U.S. transit software business with three new agencies

A screen displays the logo of Uber Technologies Inc at the New York Stock Exchange (NYSE) in New York, U.S., May 10, 2019. REUTERS/Brendan McDermi/File Photo

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April 14 (Reuters) – Uber Technologies Inc (UBER.N) said on Wednesday it had signed deals with three new transit agencies to provide routing and matching technology to their public transport fleets, the latest foray of the company in the space of public transport.

The Denver Regional Transportation District, Cecil County Transit in Maryland and Porterville Transit Agency in Central California will use Uber’s software to operate their transit or paratransit service, the company said. .

Riders in these cities can book public transit or wheelchair-friendly rides through the Uber app, but unlike regular rides, transportation will be provided by transit agency drivers and vehicles.

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Uber did not disclose financial details of the deals, but an executive said last year that providing software presented higher margins for the company than traditional transit services.

Uber said it remains in active discussions with several other transit agencies. The company previously announced software-based agreements with two other transit agencies in Marin County, Calif., and Cape May County, New Jersey.

The technology-based deals are separate from Uber’s other transit services, which allow agencies to replace certain fixed bus routes with on-demand rides in low-density or off-peak areas. Read more

Uber has gradually deepened its collaboration with agencies over the past few years and acquired transit software provider Routematch last year, saying at the time that the deal would allow it to quickly expand its customer base from public transport agencies.

The foray into transit also comes at a time when Uber’s core transit business has been hit during a coronavirus pandemic.

Uber said on Monday its mobility business is recovering as more Americans get vaccinated and its global mobility business in March recorded its best month since the pandemic began.

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Reporting by Tina Bellon in Austin, Texas; Editing by Stephen Coates

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