By Polina Marinova
April 10, 2018

This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.

The bike-sharing war is roaring in the United States following its explosive popularity in China and Europe.

Yesterday, Uber acquired dockless e-bike service Jump Bikes (formerly known as Social Bicycles) for a reported amount of $200 million. The company had only raised little more than $11 million in venture funding from investors including Menlo Ventures, SOSV, and SineWave Ventures.

Jump became the first stationless bicycle service to receive a permit to launch in San Francisco. Since then, the company has launched 250 dockless, pedal-assist bikes on the streets of San Francisco.

“Rolling out potentially hundreds of bikeshare programs across the U.S. will require hundreds of millions of dollars in capital,” said SOSV partner Brad Higgins, who was an early investor in Jump Bikes. “Instead of Jump’s management team spending half their time raising this additional capital, Uber’s financial strength will allow them to focus all their time and efforts on the rollout and support of these bike-share programs.”

He also pointed to Uber’s experience in setting up local operations around the country, which could be helpful to Jump as it tries to expand rapidly. Since the bike-sharing market is still in its infancy, many services operate in a legal gray zone. About half of U.S. states classify e-bikes as motor vehicles, requiring licensing, registration and even insurance, making them illegal to ride. Could Jump have an advantage over its rivals now that it’s under Uber’s umbrella?

“It will help Jump in some places and hurt in others,” said an Uber investor familiar with the matter. “In jurisdictions where Uber has good political relationships, it adds value but they also pick up all of Uber’s baggage.”

There’s baggage, but there’s also massive opportunity. In China, for instance, there were more bike-share rides between 2013 and 2017 than there were rideshare rides in the U.S. during the same period. So rather than compete with some of these well-funded dockless bike and scooter market entrants, Uber chose to acquire one of them.

In the U.S., there are companies like Motivate Co, Bird, LimeBike, and Spin, but there’s no one dominant market player yet. Bird and LimeBike have each raised more than $100 million in venture funding — and they’ll need it to fend off the behemoth that is Uber. “The next 12-18 months will determine the market leader, so speed to market with the best consumer product and experience will make all the difference,” Higgins said.

The question looms — who will control the new wave of dockless bike-sharing? Will we see a consolidation of the entire industry where Uber purchases a dockless scooter company next? Will Lyft scoop up a competing startup in the near future?

These are all questions to keep in mind as this move gives Uber an edge over its rivals — it’s a cheaper and more convenient option. Lyft, for example, has dipped a toe in the bike-sharing world, but it’s not too significant. In February, the company partnered with the city of Baltimore in a deal that granted Lyft five bike-share stations that offer both bike and ride-sharing pickups.

The Jump acquisition allows Uber to prove its commitment to becoming an urban mobility company rather than just a taxi alternative. The bike-sharing arms race will be one to watch.

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