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Uber launches trucking marketplace
Ride-hailing pioneer Uber Technologies
Inc.’s decision to expand its load-matching
technology from personal transportation to
freight hauling could bring big changes to
the industry if Uber applies its “surge pricing” system to trucking rates.
The San Francisco-based ride-matching
service recently launched an “UberFreight”
website and could introduce a live app by
early 2017. The sparse Web page offers
no details about the venture but invites
shippers and carriers to enter their e-mail
addresses to receive updates as it develops.
Other than the website launch, however,
the company has been tight-lipped about
its intentions since it announced plans to
expand its ride-matching platform into the
trucking sector after acquiring autonomous
trucking startup Otto in August for $680
million.
In a statement, Chelsea Kohler, an Uber
spokeswoman, said that “UberFreight is a
marketplace that will connect truck drivers with the right load wherever they are.”
Kohler added that the platform developed
by Otto and Uber is “designed to operate
in the current market with regular trucks.
Over time, the platform will be merged with
Otto’s self-driving technology, creating a
freight network that is constantly learning
and improving.”
PRICING CHANGES AHEAD
Uber’s move could affect the trucking
industry by bringing its advanced Web-based platform to a sector that has traditionally been reluctant to embrace the latest
technology. The launch could also force
change in the industry’s market structure
should Uber apply its “surge pricing” strategy to freight rates.
Uber is known in the ride-hailing industry
it developed for using surge pricing, a flex-
ible fare scale that boosts the cost of a ride
when demand exceeds supply. The company
says the system works as an incentive to get
more drivers on the road during peak hours,
which in turn would correct that imbalance.
However, while that model has generated
increased revenue for Uber in the passenger
sector, the approach would not work as well
in freight, one expert says.
Surge pricing can be inefficient
because it establishes a fixed min-
imum price beyond which rates
will not drop, even if there’s spare
capacity, according to an e-mail
comment from Zvi Schreiber, CEO
of the online price-quote platform
Freightos Ltd. That means Uber
may choose to pursue a more flex-
ible pricing model for its freight
division, he said.
“While Uber is still working out
some details regarding how its mar-
ketplace will function, if it manages
to accumulate enough buyers and
sellers on the marketplace, it has the
opportunity to be even more effi-
cient than the surge pricing model
with live dynamic pricing, driven
by huge datasets,” Schreiber said.
“There will likely be surge pric-
ing during increased demand, but
that would also enable reverse-surge
pricing when extra capacity exists.”
That means Uber’s entry into the
freight market could make its big-
gest short-term impact by providing
increased transparency into avail-
ability for both carriers and ship-
pers, he said.
And in the long term, Uber would
have a much larger impact on the
sector if it develops self-driving
trucks. “The real threat for trucking
looms in the autonomous trucks,”
said Schreiber. “In the long run, if
Uber does indeed flood the market with automated trucks that can
drive around the clock, it could
pose a huge challenge to ‘
traditional’ trucks.”
