In the US, the trucking industry moves 10.5 billion tons of freight each year. To make that happen on the daily, shippers must be able to connect with carriers for ground shipping services. One way to manage freight hauls is with Uber Freight, which offers an app-based platform for bridging the gap between shippers and carriers. The service allows drivers to pick up freight loads from wherever and whenever they are ready to haul freight. Uber Freight is also disrupting the way the trucking industry traditionally managed loads–via online load boards and in-person networking. Is the disruption worth the cost?
What is Uber Freight
Uber Freight was launched in May 2017 as a division of Uber. Uber Freight is billed as a high-tech way of handling freight loads in the commercial trucking sector. The system allows carriers and shippers to manage freight using an app via their smartphone or tablet. When users access freight loads using the app, the Uber Freight platform lets users negotiate pricing upfront. This reduces the stress and time spent communicating between shippers and carriers.
Benefits for Shippers
Shippers who utilize Uber Freight are able to provide upfront pricing for transparency with carriers. From there, shippers can book a freight load using the app for ease. The Uber Freight platform is designed for efficient workflow, and you have access to 24/7 customer service for support.
Benefits for Carriers
Carriers are able to use the app to find freight over the road. This is beneficial for local truck drivers, as well as over the road long haul truckers. Those drivers who want to avoid deadheading for no or minimal pay can find freight on their route and in real-time. Carriers also receive quick pay services for no additional charge. Along with the upfront pricing from carriers, these pricing perks increase the use of the program.
Carriers can pick up a single freight haul and not be locked into a contract or obligation with a shipping customer or company. This is useful for small-to-medium trucking companies that are trying to find freight hauls for their drivers. According to Truck Info, 97 percent of companies have fewer than 20 drivers. These are the carriers that are more likely to use spot-market freight load services.
Market for Carriers
The best way to determine the value of Uber Freight is to consider who is using the service. Along with SMB trucking companies, you have owner-operators, independent contractors, and company drivers. For owner-operators who want to remain self-employed in the trucking industry, Uber Freight is a home run. However, company drivers and independent contractors who are contracted to drive for a single trucking company are not likely to use this service.
These drivers are depending on their trucking employer to find all freight hauls. National trucking companies like Swift-Knight, Werner Enterprises, and Schneider are all going to use their own proprietary system for finding loads. This allows these carriers to manage company driver and equipment data in-house and procure freight loads on their own terms. Yet as noted, these companies make up a small portion of the marketplace. Therefore, there is a marketplace for Uber Freight as long as the company remains focused on the end consumers–shippers and carriers.
Customer and Company Reviews
Since the Uber Freight platform and app has been introduced into the trucking industry, reviews have been mixed. According to Indeed Uber Freight company reviews for the company, Uber Freight has a tech vibe and youthful culture. This is quite the opposite of the traditional truck driving culture. However, for the service that UF offers, tech is front and center.
The issue is that there could be a disconnect between how the company interacts and supports shippers and carriers who use the service. There need to be experts working at this multi-billion-dollar company who are knowledgeable in freight rates and shipping issues, such as deadheading, hours of service rules, and electronic logging device malfunctions. Otherwise, there is the chance that Uber Freight could miss the mark in providing a value-added service that this target consumer base needs.
Current Financial Situation at Uber Freight
Here is the big issue with Uber Freight and it has nothing to do with its services. The company may be over-extending itself financially. In September 2019, Uber Freight announced that the company was moving its headquarters from San Francisco, California to Chicago, Illinois. The company also announced it will be hiring 2,000 employees in the Chicago area in the next three years. This is part of an investment of $200 million a year in the area according to TechCrunch.
However, that same news report also highlights how Uber has had a massive $5.2 billion downfall in that same quarter. Uber has already discontinued the UberRush service, which was an expedited same-day parcel delivery service. Also, consider that Forbes reports the app that Uber Freight offers is rudimentary and does not have a lot of tracking intelligence. As a result, there are other companies stepping in, such as Omnitracs and Descartes Global Logistics Network, to handle more dedicated services. This is a direct competition to Uber Freight.
For instance, when a shipper needs to hire hazardous materials endorsed driver for a chemical freight load, there has to be a way to manage this within the app. Uber Freight also requires all drivers to have a perfect CSA score and no conditional safety ratings in order to be eligible. This can be limiting to trucking companies and drivers with unsatisfactory or conditional scores.
Bottom Line for Uber Freight
As a result, there are fewer users of the app who can work directly with shipping customers to provide more value-added services above and beyond what the app offers. The bottom line is that the Uber Freight load app and services are serving a purpose in the trucking industry. However, the benefits of this service are still up in the air.