So everyone has heard that Uber has actually entered in to the transportation space by starting up a freight brokerage company call Uber Freight. They use some software and have literally become the Uber of Freight themselves to match drivers with freight. I am speculating that the software is awesome and based on the comments I have read on blogs is that drivers really like it the convenience of the app.
I think Uber can do a lot better then a freight brokerage and I can only assume that they have some better plans then to simply operate a freight brokerage business with some technology attached to it.
I think Uber should buy an LTL carrier. They have a crazy 70 billion market capitalization and people want them to make some big moves. They should by SAIA or AAA Cooper or maybe even go big and buy XPO Logistics. There are a lot of options out there.
Here is why…
1st LTL is local and long haul all in one. They can use their app to work with local drivers to make pick ups and deliveries. Uber is really good at local because it is has so much experience with ride sharing. They could use people with straight trucks to to make pick ups and deliveries. Presumably for a lot less then operating and owning their own fleet.
2nd – Uber freight could use its app to send the freight over the road to each of the other hubs. They can use the app to assign Freight to driver standing by ready to go to a certain place. This also trains Uber on the over road part on their technology as the work with drivers who travel long haul to make deliveries.
3rd – If they are going to make self driving trucks work they could implement them with their own freight. The long haul terminal to terminal is the perfect proving ground for Uber to start this up. They would control the origin and the destination. No worries about going to a delivery where they have to back up to an unfamiliar place. They can check out and perform maintenance on the trucks. As the world gets up to speed with the autonomous driving world it would be much much easier to Uber if they controlled the start and end points.
4th – LTL Pricing is low enough that people will pay up front for it. No one wants to pay thousands of dollars to ship goods up front. Between the brokers and the factoring companies there is a lot of cash flow float int he market place for shippers. But people do pay for LTL freight up front with companies like GlobalTranz and Freight Quote.
5th – The money is in the trucking and not in the brokerage. Why mark up a product when you can be the product. With it’s own infrastructure Uber Freight could start selling customers or rather use it’s app to fill extra space when it is available and find capacity when their trucks are full.
A big move is what they need to really take on the industry. Hmm. Maybe Amazon should take a lo0k at it. Does Tesla have those self driving trucks ready yet.