Uber Freight bowed headquarters in downtown Chicago’s Old Post Office last October in a bold move signaling the company’s long-term ambitions.
“We stand for pushing the envelope,” Lior Ron, head of Uber Freight, said Thursday at a Chicago supply chain conference organized by Reuters. “One of the reasons we chose the Post Office is because this was the epicenter of United States logistics…. We chose that to really symbolize what we’re trying to do.”
The move is a bold one for a business that’s looking to digitize and streamline an industry that has long been bogged down by paperwork and a market dynamic characterized by swings in favor of either carrier or shipper depending on what point of the cycle companies are in.
The business was launched in 2017 with the key aim to make it easier for shippers to book loads and streamline the payment process, with Uber Freight’s founders using conversations with drivers at the Mid American Trucking Show as the starting point.
The service initially rolled out in Texas before expanding to California, Arizona, Illinois, Georgia and the Carolinas.
Last year Uber Freight revenue jumped to $2.1 billion, from $1 billion in the prior year, driven by the acquisition of the Transplace business along with new shippers and carriers added to the platform.
Uber Freight’s earnings before interest, taxes, depreciation and amortization narrowed from a $227 million loss in 2020 to a $130 million loss last year.
“It’s a huge opportunity and huge task we all need to take,” Ron said of digitization.
Digitizing the supply base has helped boost more bookings during off hours and reduce empty miles, or the trucks on the road with no cargo, for Uber Freight users.
Transparency is key, the former Google Maps product lead said. Uber Freight is not unlike the Uber Rides or Uber Eats app in which shippers and carriers can see upfront pricing and capacity, which are both important to building trust, Ron added.
He pointed to the challenges of what’s largely been standard operating procedure in the trucking industry, with either shippers having the upper hand when there’s an excess of capacity, or carriers in the driver’s seat when the market is tight.
“This is a vast marketplace,” Ron said. “At the end of the day, shippers and carriers need to collaborate.”
Collaboration is one of the reasons Uber Freight bought Transplace in a $2.25 billion all-cash deal that closed in November. The Transplace acquisition brought the company’s transportation management and logistics software into the Uber Freight fold and is a means of sharing best practices, according to Ron.
“We’re not done yet. Now, as always, crisis breeds opportunity,” Ron said of the country’s ongoing supply challenges that will call for further digitization within the freight and transportation industry.
“First and foremost, continue to digitize the supply base,” the executive said of what will need to take place in the coming years. “The topic of the hour now is ports and dray movement and the White House is trying to help that. We need to digitize all modes, not just truckload.”
“It is coming,” Ron said of driverless trucks.
Uber Freight is already moving two to three loads weekly between Dallas and San Antonio on self-driving trucks. Drivers are currently still in the cab during these runs, but the driver will eventually be removed in the next 12 months, according to Ron.
“It’s happening and I think it’s going to be very transformative, and we’re excited about that,” Ron said of the technology.
An industry overhaul will take time with Ron likening it to a “boiling of the ocean.” He’s been there before with Google Maps, pointing out it took a decade to take the concept global. For freight and transportation, it will likely take two to three times that, but it’s moving in that direction, he said.
“There’s so many siloes,” Ron said. “Everyone is operating in their own domain; things are not connected. I think the market demands connectivity. What we’re going to create is that integrated logistics platform.”