In its Quest to overtake the transportation business, Uber is dreaming about the day when everyone gets around flying cards and self-driving cabs. But this plan will not be completed since the things become robotic. Today at Silicon Valley Uber announced Uber Freight a bid to bring ride-hailing model to be trucking.
With Uber Freight, Travis Takes on Trucking
The service which quietly launched in Texas late last year, connect truckers with stuff that needs to be tracked, much like an app which connect drivers with peoples who need to move. The concept is same but it is for freight.
And it gives the company a way into an industry that touches 70 percent of American goods. “We’re going for that magical Uber experience,” says Curtis Chambers, one of the company’s highest-ranking engineers. And, of course, that magical Uber revenue.
With Uber Freight app in their hands, drivers will find loads sorted by destination along with their deadline and requirements. When a driver finds it suits him a few finger taps will confirm the job. Uber promises to pay them within a week or so of delivery, so drivers don’t find themselves waiting to be paid to be customers. Uber requires drivers to have a commercial license, clean record and carry the required insurance.
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Following Uber service the house that Travis build designed Uber Freight to displace middleman in such case brokerage firms that match drivers with cargo. “We fundamentally believe that computers are better at logistics than human beings,” says Kevin Novak, the company’s head of data (and the guy who brought you surge pricing). Uber will determine to price based on market conditions (moving flowers the week before Mother’s Day costs extra) and expects to refine and automate the process as it gains experience and data.
There is plenty of fat in brokerage business today. “Most truck brokers are pretty human-driven, with dialing for dollars on both sides,” says Ryan Petersen, CEO of Flexport, which helps businesses organize their shipping efforts. “Turn that labor into software, and you’ve really unlocked some volume.” But Uber’s not exactly driving a DeLorean into the 1950s, here. Big players like Total Quality Logistics already use apps and attract drivers with the promise of timely payment. “That’s table stakes for truck brokerage,” Petersen says
Still, Uber holds the advantage when it comes to software and managing data but in its campaign to topple taxi industry all hinges on pricing. Existing brokerage typically take 12 percent cut on deals they arrange, Petersen says; Uber is not revealing its rate for the time being but it has experts to handle such things and will provide the same job for far less price.
For now, Uber Freight remains a bit player in the trucking game. So far, it is focused on Dallas, Austin, San Antonio, and Houston, Texas. It only tackles full loads, even though there’s money to be made helping drivers hauling small loads find other cargo to fill the empty space. “At some point that could definitely be something we do, but I think it’s like trying to build Uber Pool before we built Uber,” says Chambers. “We wouldn’t have the density of supply and demand.”
Even without robots taking the wheel, Uber benefits from this. With Uber Eats, it’s building delivery networks in dozens of cities. “Trucking can be the connector between these nodes,” Petersen says. “If they do that, they can beat UPS and FedEx.” Given the year Uber’s been having—with the scandals and the lawsuits and the #deletingUber—a win would certainly be nice.