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

April 14 (Reuters) - Uber Technologies Inc on Wednesday said it had signed deals with three new transit agencies to provide routing and matching technology for their public transportation fleets, the company’s latest foray into the transit space.

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

Passengers in those cities can book transit or wheelchair-friendly rides through the Uber app, but unlike regular ride-hail trips, transportation will be provided through the transit agencies’ drivers and vehicles.

Uber did not disclose financial details of the agreements, but an executive last year said providing software presented higher margins for the company than traditional ride-hail services.

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

The tech-based agreements are separate from Uber’s other transit service, which allow agencies to replace some fixed-line bus routes with on-demand ride-hail trips in lower-density areas or at off-peak hours.

Uber has gradually deepened its collaboration with agencies over recent years and last year acquired transit software provider Routematch, at the time saying the deal would allow it to rapidly expand its transit agency customer base.

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

Uber on Monday said its mobility business was recovering as more Americans got vaccinated and its global mobility business in March posted its best month since the beginning of the pandemic. (Reporting by Tina Bellon in Austin, Texas; Editing by Stephen Coates)

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