Uber pushes into on-demand public transit with its first SaaS partnership

Uber will manage an on-demand service for Marin County in the San Francisco Bay area with a Software as a Service product as part of the ride-hailing company’s broader strategy to push into public transit.

Transportation Authority of Marin (TAM) will pay Uber a subscription fee to use its management software to facilitate requesting, matching and tracking of its high-occupancy vehicle fleet, starting with a service that operates along the Highway 101 corridor. Marin Transit trips will show up in the Uber app and let users book and even share rides.

Users in Marin County will see a new option called Marin Connect when they open the Uber app. The feature allows customers 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. There is no booking fee, Uber said. The app will allow riders to share the ride if they’re traveling in the same direction. For now, the maximum occupancy is two riders.

The service will operate weekdays from 6 a.m. to 7 p.m. PDT and run down the Highway 101 corridor between Mill Valley and Novato.

The deal marks the first SaaS partnership for Uber and a likely pathway moving forward. Uber will generate revenue by offering this as a subscription. All of the fares will head directly to Transportation Authority of Marin. The company, which recently offloaded its micromobility unit Jump in a deal with Lime, has reshaped its strategy as the COVID-19 pandemic has upended its business. Uber CEO Dara Khosrowshahi said during the company’s last earnings call that the company is focused on growing Eats, its food delivery business, as well as public transit.

This is not Uber’s first foray into public transit. The company¬†already has a public transit feature called Journey Planning that is available in more than 15 cities around the world, including the Marin area since 2019. The company has also worked with Denver and Las Vegas. In 2018, Uber partnered with mobile ticketing platform Masabi to let people book and use transit tickets from within the Uber app.

This SaaS partnership with TAM is a bigger push into public transit and has more potential to generate revenue if Uber can convince other transit authorities to follow suit. It also puts it in direct competition with Via, an on-demand shuttle startup that hit a $2.25 billion valuation in March 2020 following a Series E funding round led by Exor, the Agnelli family holding company that owns stakes in PartnerRe, Ferrari and Fiat Chrysler Automobiles.

TAM is also partnering with Uber to launch a first/last-mile voucher program to and from transit stops. These vouchers can be used for Marin Connect as well.

Both services will begin July 1.