Next For Uber: Disrupt Logistics Like It Did The Taxi Business?
After about two years of operation in the United States, Uber Freight is opening up shop in Europe, its aim there seemingly the same as here — to disrupt logistics in the same way it upended the taxi business.
Instead of brokering rides for people, the Uber Freight app brokers rides for goods, allowing carriers and drivers to book a load with just a few taps of a button.
Uber Freight, which launched in the U.S. in 2016, is out to automate many of the services now provided by transportation intermediaries, such as load matching — which independent owner-operator of a truck gets which cargoes — asset tracking and freight payments, Transport Topics reports.
Apps like Uber Freight can help drivers find loads close to home, manage their hours better and get them paid more quickly, Hire Velocity reports.
Uber Freight CEO Lior Ron said the company plans to exploit existing inefficiencies in the logistics business, both in the United States and the EU. Both are huge markets with shippers struggling to find available drivers to move their goods, and in the case of the EU, 21% of total kilometers traveled by trucks are empty, Ron wrote in a blog post.
"When you combine these shortcomings in the market, the price of goods goes up," he wrote. "A more efficient and transparent freight marketplace is something Uber Freight can bring to the table."
So far, it isn't clear whether Uber Freight will be able to shake up logistics, especially since the industry depends so heavily on established relationships between shipping companies and drivers.
“We expect Uber Freight and Convoy to add to competition in the brokerage market, but it is unclear whether they will meaningfully change the dynamic in the medium term,” UBS Analysts' Thomas Wadewitz wrote, as quoted in Freight Waves.
Even so, Uber Freight and Convoy — which is a similar app, backed by both Bill Gates and Jeff Bezos — are already taking some market share from more traditional operations, according to Freight Waves.
Uber Freight hasn't detailed how often its app has been used since its launch, but Uber Freight Senior Product Manager Eric Berdinis told Quartz that it has attracted a loyal following of drivers.
So far the app isn't being used by the Walmarts or Targets of the world, but Uber Freight has bagged a number of smaller clients. For example, cranberry juice specialist Ocean Spray started testing the app last year and now plans to use it for 3,000 loads next year.