Uber Enters the Freight Industry

 In Distribution, Logistics, Operations

Why Uber?

As most people know, Uber is a transportation service that connects a driver with a customer who needs a ride from Point A to Point B. The service operates through the Uber app where the customer sends their current location and desired destination to a nearby driver. After receiving this information, the driver then proceeds to pick up the customer and drive them wherever they wish. It operates like a taxi service, but it is more convenient and personalized because the app allows the customer to find an Uber nearby with just a press of a button; there is no standing out in the rain trying to wave down a taxi or calling every taxi service in the area to see if there is an available driver. Uber also touts that it is a more affordable option than a taxi, so choosing Uber is an easy decision for customers.

Example of current Uber app.

New Markets

Uber is now expanding into the freight and logistics industry with the same concept. Customers will now be shippers who have loads that need to be moved from Point A to Point B, and drivers are carriers who transport the shippers’ loads. Shippers will be able to communicate directly with carriers instead of dealing with a third-party company. Cutting out the third party makes shipping quicker and more convenient, and communication is streamlined.

Self-driving truck proposed by Otto Trucking

While skipping over the middle party makes operations easier for shippers and truckers, thousands of Americans could possibly lose their jobs. Even more, Uber is considering about implementing self-driving trucks in the future through the acquisition of a small company called Otto Trucking. The company was a small trucking company that was trying to bring the first self-driving trucks to market and was considering offering a service like Uber Freight. Uber quickly acquired Otto so that the two companies could combine strengths instead of compete against each other; Uber has the necessary financial strength and a strong brand identity while Otto can provide innovative trucking technologies.

Forward Thinking

Uber pricing, along with a multitude of other features, is unknown at this point in time, but we can assume that “surge” pricing will be implemented during peak shipping periods such as holidays. The company is quietly launching this service for unknown reasons, but we can guess that it is still perfecting the details of smooth and efficient operations. Furthermore, Uber might not have enough physical capital, such as trucks, for the demand that a huge launch would ensue.

Automation is becoming a more relevant topic across all industries and the trucking industry is no different. It is projected by the CEO of Tesla, Elon Musk, that robots will continue to replace humans in every industry even down to hotel staff and security guards. This scenario would be much further in the future, but it is something for which we should prepare; it might be necessary to consider a ‘basic income’ where people are guaranteed a monthly earnings.

How will Uber Freight affect your business? Share it with us.

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