With the official launch of Uber Freight, an app that matches trucking companies with loads to haul, Uber is looking to transform the world of freight transport much as it has changed the world of taxis with its ride-sharing app.
After years of other companies trying to offer what are often nicknamed “Uber for trucking” freight-matching services, Uber itself is launching a load-matching app it says will make “logistics and transportation as magical as pressing a button and getting a taxi,” according to Eric Berdinis, product lead for Uber Freight.
Berdinis emphasized in an interview with HDT that Uber Freight will address many of the pain points faced by owner-operators and small fleets (up to about 10 trucks) as they strive to keep up a flow of well-paying loads and keep their trucks moving profitably.
Rumors have swirled about the new service since Uber set up a minimal website for it late last year and hired a number of people from existing brokerage companies. One thing that Uber Freight is not — at least not yet — is shippers using an app to call a self-driving truck to pick up their load. Nor is it running its own fleet of trucks. A widely circulated photo of a rig with an Uber Freight logo on the trailer, recently tweeted by Uber CEO Travis Kalanick, was nothing but a marketing prop, a backdrop for Uber Freight’s recent owner-operator recruiting and driver appreciation events.
“Uber has expanded from moving people to moving food with the UberEats product to moving things with the UberRush product, and Uber Freight is the next foray into the world of transportation and logistics,” Berdinis said.
Here’s how it works: Owner-operators or a dispatcher handling a small fleet (10 trucks or fewer) sign up with Uber Freight. Then they can use a mobile app to find dry van or refrigerated truckload freight meeting the parameters of where and when they want to pick up, where the load is bound, price offered, and other factors. Once they find a load that fits their needs, they push a big “Book Load” button, and they get instant confirmation of the load booking and rate. If they have questions about a load, there’s a phone icon on every page of the Uber Freight app allowing them to reach Uber Freight staff with real-world brokerage experience. Payment is made immediately once the load is delivered, although it may take a few days for the AHC bank payment to clear. Even if the shipper doesn’t pay Uber Freight for 60 days, the truck owner who delivered it gets paid on delivery.
There are no near-term plans to mesh Uber Freight with self-driving trucks. “That’s another one of those ideas that has been floating around,” he told HDT, like the viral social media image of the Uber Freight truck. “I can say Uber’s mission is to make transportation reliable, seamless and safe, and it has lots of bets all over the place,” from flying cars to self-driving cars and trucks. “Right now the self driving rucks and Uber Freight are two independent bets on what the future of trucking might look like. Certainly when Uber bought [autonomous truck tech start-up] Otto, it whet its appetite for what it could do in the trucking space. Right now that’s two separate teams working on two separate paths… One day will they cross paths and create something together? Possibly, but it’s not something the team is focused on right now.”
The system has been operating in a stealth or soft launch mode for several months in Texas, moving freight between the Dallas/Houston/San Antonio triangle. With the launch of the official site, while loads are still concentrated heavily in this region, there are loads available all around the country.
Some users are checking it every day or even hourly, Berdinis said, and may plan out their loads for the next week using nothing but the Uber Freight app.
“Ever since we put up our splash page late last year, we’ve had an overwhelming amount of inbound from carriers, owner-operators up to large carriers, and [on the shipper side] from mom and pop shops up to the Fortune 500 shippers,” Berdinis said. “I can’t reveal numbers, but one of our challenges has been scaling up the team to handle that and start moving freight. We have lots of inbound from shippers as well as a team that handles each account and makes sure everyone has a good experience.”
Berdinis criticized traditional brokerages, saying many take advantage of carriers in a way that has given the word “broker” a bad name. They may gouge truckers on rates, he says, or pull bait-and-switch tactics that result in drivers delivering to facilities that are notorious for long delays and treating drivers poorly. They may offer a load and then take it back when they find a carrier that will move it cheaper. And payments may not be fast in coming, necessitating the need for a factoring service.
While legally Uber Freight is a brokerage, he said, it won’t resort to those types of tactics. The point is to create a better experience for drivers, owner-operators and small fleets.
What happens if they can’t find someone via the app to take the load? Then Uber Freight relies on a network of medium- to larger-size carriers to get it delivered.
Critics of the concept of “Uber for trucking” have contended that moving freight is a lot more complex than moving people. There are different types of freight, different facilities, appointment deadlines, etc. When asked about this, Berdinis called this aspect “one of the more fun challenges of working on this freight product, as we’ve had top engineers coming from the ride side learning how to adapt to those challenges. There are so many more variables in freight, pickup windows, facilities have different requirements, but that’s something Uber has thrived on. There’s a lot more complexity on the ride side that appears on the surface, which is part of what makes Uber so magical. Somehow everyone can find an Uber leaving a Beyonce concert, because of a lot of smart people planning and a lot of smart algorithms. That combination of operational experience as well as technology experience has enabled Uber to expand to over 460 cities around the world, with every city being very different.”
The way Uber deals with those challenges, he said, is to tackle each one by one and create a process, and eventually technology to automate those processes. “It is pretty transferable to the freight world, where there are infinite variables and infinite things that go wrong.”
One way it addresses the things that go wrong is through accessorial fees. For detention, it's $75 after two hours. Layovers are $300 per day, "Truck Order Not Used" is $200 per $2 per mile deadhead, and driver assist is $75 per load. The Uber Freight app uses GPS to allow Uber to track what’s going on with the load, and it helps prove to shippers when drivers arrived at a facility.
While Berdinis cited UberEats and UberRush in talking about how Uber is addressing the transportation and logistics arena, those services have not been without their problems. Late last year, a courier in New York filed suit, claiming he and other UberRush and UberEats delivery people, were owed unpaid tips and wages. And earlier this month, UberRush stopped offering the service for restaurants, asking them to move to the UberEats platform, and also restructured its pricing. And the original Uber passenger service has been challenged in court with a number of lawsuits by drivers claiming they have been misclassified as independent contractors.
There are in fact already a number of load-matching apps out there, ranging from companies that have been doing this a long time like DAT, to new entrants like DOFT, which is billing itself literally as an Uber for trucking. We asked Berdinis what makes Uber Freight different.
“Most of the apps that are out there might show the load, but it’s still on the carrier to pick up the phone to call to see if that load is real,” Berdinis said. “A lot of times that load posted hours or days ago and someone else has taken it, but no one removed the posting. They’re really no different than the current brokerage model; there’s no book it now button, no instant experience.
"There are some other ‘Uber for trucking’ kind of companies, but none of them are providing that completely seamless experience; there’s some hand holding or checking that has to happen. Maybe some are very technology focused, some are very operations focused, but we haven’t seen them take off, because you need both. You need that true defined demand matching experience, and you need the scale so every time you open the app you know there’s a load for you.”
Originally posted on Trucking Info