Friday, September 30, 2016

Uber – the real one – plans to enter trucking

Uber plans to enter the trucking business -- the long-haul, truckload sector, in fact.

That's the gist of a story the Reuters news agency released on Thursday. The story is at best, let's call it unfocused.

For certain we're talking about the real Uber - the one that brings elderly ladies to doctor appointments, hauls drunks home at closing time, and provides thousands of part-time jobs. Or maybe it’s the Uber that's putting taxis out of business with thousands of low-pay, no-benefits workers. Kinda depends on your point of view.

We’ve had a flood of companies that refer to themselves as Uber for trucking; this one is the real thing.

According to Reuters, Uber plans to compete with traditional freight brokers. "Uber has already started pitching services to shippers, truck fleets, and independent drivers," the news service reported.

The revelation comes in an interview with Lior Ron, co-founder of Otto, a Silicon Valley start-up developing retrofit kits to made existing trucks "autonomous." Uber recently bought Otto for $680 million.

Now here's where things get kind of fuzzy.

The Reuters story says Otto will expand its truck fleet from six vehicles to 15 and that Otto trucks "and others equipped with Otto technology will begin hauling freight bound for warehouses and stores."

Wait a minute; who is going into the trucking business, Uber or Otto? Is it going to be a big-time assault on the brokerage industry or a small, perhaps dedicated retail operation?

Best guess is that Otto and its retrofitted small fleet of autonomous trucks is going to do one thing and big brother Uber is going to do something else.

Neither officials at Otto nor Uber responded to email requests for clarification.

But no way is Uber going to put freight brokers out of business says Tom Heine, CEO of Aljex Software, a major technology provider to the brokerage industry.

“We’ve seen a number of companies that described themselves as Uber for trucking launch in the last few years,” Heine said. “Many have already failed, and the ones that are still around often survived by becoming brokers themselves.”

Heine pointed out that Uber is losing money big time in its primary passenger business. The New York Times said the company reported a $1.2 billion loss for the first half of 2016.

“If they come into the trucking business, they won’t last,” Heine said.

Whatever Uber has in mind, it clearly involves owner-operators.

Reuters reported Otto is "forging partnerships with independent truckers." Later in the story, Ron tells the reporter -- apparently referring to Uber -- that "thousands" of owner-operators have already reached out to the company”.

Thousands? Really?

It could be true, of course, but no one at OOIDA is aware of "thousands" of owner-operators lining up to do business with Uber.

In any case, we're probably at the very beginning of this story. We'll keep you up to date.

Meanwhile, if you have approached or been approached by Uber/Otto, let us know. If there's something going on out there, we'd love to know about it.