Uber enters the road freight market

Uber has edged its way into the logistics market. It might seem unlikely for a company that provides a taxi service, however the company has a vision of using its information capabilities to manage truck and van capacity.

The company has launched two products, Uber Freight and Uber Cargo. The first is essentially an evolution of the concept of a freight exchange. Although it appears that Uber is cautiously quiet about its launch, the core of Uber Freight is the same as its taxi service, except instead of passengers and cars, it connects customers with freight to move to truck owners.

Uber apparently wishes to improve market transparency and reduce the role of truck brokers. This would offer customers better, more accurate pricing and offer the ability to access underutilised capacity. Such a service is apparently being combined with a wish to offer ‘self-driving’ trucks. Earlier this year Uber bought Otto, a company that was developing autonomous truck guidance technology. Last week (25 October 2016) Uber claimed to have completed the delivery of a consignment for Budweiser that was autonomously driven for part of the route using Otto’s technology, a world first. Uber’s vision seems to be that it will weld together its web presence with automated vehicles to produce an integrated transport network.

The second aspect of Uber’s logistics ambitions is ‘Uber Cargo’.  This is slightly less ambitious as it offers the ability to access light commercial vehicles and cars to move small, apparently non-palletised, loads for small businesses or individuals. It appears to be very much a hybrid of its existing taxi service, available via its mobile phone app.

Sceptics might view Uber’s effort in this market as simply replicating existing freight exchange offerings. Certainly, companies such as FreightEx or Transporeon have been offering highly developed services in the road freight market for the best part of ten years. It is unclear what Uber offers beyond what already exists. The declarations about self-driving vehicles also seem to be on the optimistic side. However, what it does do is underline the transformation that digital technology is already having on a variety of logistics markets.

Source: Transport Intelligence, November 3, 2016

Author: Thomas Cullen