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New Uber Freight Promises to Cut Middleman and Costs for Shippers

Slowly but surely, Uber wants to deliver everything—and cargo is next up.

The tech-savvy transportation company quietly launched Uber Freight, essentially its own “Uber for trucking” division.

The move follows the company’s acquisition of driverless trucking company Otto announced in August. Otto’s aim had been to create self-driving kits that freight networks could install into trucks on their own, but it was also itching to build an Uber for trucking marketplace, Business Insider reported.

In just four months, that goal has been realized and Otto and Uber are soft launching their own trucking business.

“Uber’s decision to compete with the dozen ‘Uber-for-Trucking’ companies isn’t a surprise,” Dr. Zvi Schreiber, CEO and founder of logistics tech company Freightos, said. “There is a 50-year history of matching trucks with shipments, dating back to Dial-a-Truck in 1978. Truck matching is one driver of the U.S. economy’s efficiency with 8.2% of the U.S. GDP spent on logistics, compared to nearly 20 percent in China.”

Uber Freight will connect shipper and truck more or less like regular Uber connects driver and passenger. And instead of going through a brokerage firm to arrange freight transportation, shippers will be able to skip the middleman.

According to Business Insider, Uber Freight will offer shippers real-time pricing on the cost of moving their goods based on current supply and demand—which means surge pricing could apply to shippers too. Despite that possibility, Eric Berdinis, the product lead on Uber Freight, thinks the model will still be cheaper than using a broker.

“You’re going to save money by having real-time pricing,” he told Business Insider. “Having a middleman who is essentially making phone calls all day long at its very core is not efficient.”

Apart from cost-savings, the biggest shift Uber is driving in the logistics sector, is the move to self-driving technology.

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Those first customers for Uber Freight—some of which may be among those testing the service for the next few months before an official launch early next year—may be the first customers for the Otto self-driving kit, Business Insider said.

Technology and automation are leading the way into the future, and Uber, it seems, has no plans of missing the boat on that. The company expects self-driving vehicles will simply become a part of the freight marketplace.

“Uber’s plans to introduce autonomous trucking is the real bombshell, load matching is old news,” Schreiber said. “While domestic trucking advances, the barrier to truly transparent logistics is international shipping. $19 trillion dollars of goods are shipped globally but the industry remains wildly inefficient, with three day waits for quotes, and opaque pricing with 30 percent spreads. I look forward to the day when an international shipment from the Freightos Marketplace arrives from Asia to the U.S. and is met at port by an autonomous Uber truck.”