Skip to navigationSkip to content
ARTICLE

Can Uber be the Uber of trucking?

\
Reuters/Mike Segar
Published Last updated This article is more than 2 years old.

It wasn’t long after Michael Maleshliyski received his commercial driver’s license in 2014 when he realized there was more to trucking than driving his rig across highways near and far from his home in Arlington Heights, Illinois.

It was everything off the road—the delays at shipping facilities, the haggling with brokers, the delays in being paid—that gave him headaches. As a company driver for two years hauling refrigerated or “reefer” loads, frustration was a constant. So, a year ago, he struck out on his own as an owner-operator.

The independence proved challenging. “I was new,” Maleshliyski said. “I had a lot of problems. No one knew me, no one trusted me.”

Around the same time he made the switch, Maleshliyski said he read about Uber Freight, an app that, like its automotive counterpart, aims to match drivers with shippers via their smartphones.

Since downloading the app a year ago, he says he now uses it at least once a day, typically booking two or three loads per week. What’s more, he credits the company with more efficient loads, steadier work, and a $1,000 tire discount and $3,000 he saved from purchasing a truck with them. “I get to choose where I go now,” he said. “And I go everywhere.”

Maleshliyski is among those wondering whether Uber Freight will completely transform the trucking world, as the controversial company did with taxis, or end up as roadkill.

Although hidden in plain sight, trucking represents a critical part of the American economy. It’s also at a pressure point. It’s the most common  job in every state, according to NPR, and trucking is also a hub of tech investment as the industry races to automate. Some of the best-capitalized companies in the world are placing their bets, ranging from Tesla to Alphabet to Ford to Freightliner to, now, Uber.

Remaking a change-averse transportation industry is a daunting task, even for Silicon Valley’s biggest and loftiest dreamers. And the stakes are high: The American Trucking Association forecasts that today’s $700 billion trucking market will balloon to $1.2 trillion by 2028.

Uber Freight launched in May 2017 in Texas, then expanded nationwide and into Europe, including an aggressive marketing campaign featuring profiles of individual drivers. “Freedom to haul the way you want,” the Uber Freight website proclaims, complete with a picture of a rugged white male driver gazing thoughtfully out of his rig. In Uber Freight’s vision of the world, gone would be the downtime truckers spend waiting for loads or uncertainty from shippers about if and when deliveries will come.

Similar to other incarnations of Uber, Uber Freight does not employ the drivers or own the trucks—it’s functioning as a brokerage entity. Facilities may receive star ratings, but shippers are not currently rating carriers for now. Prices may be calculated due to demand, like surge pricing. Things like rest time and hourly limits, which are heavily regulated by the federal government, are not incorporated into the estimates. While that’s still up to carriers, an Uber Freight spokeswoman said that the company does “aim to build loads that make sense within the framework to make it easier for carriers to manage.”

In October 2016, Otto, a self-driving startup that had been acquired by Uber, announced that a self-driving truck in Colorado completed the first-ever automated delivery of 30,000 cans of beer. But the robotic Smokey and the Bandit narrative proved short-lived. The company settled a mammoth lawsuit involving Waymo and driverless cars that, among other things, shuttered its self-driving truck development in July 2018. (Uber has continued its work on self-driving cars.)

The company has declined to release numbers related to how many people are using the Uber Freight app since its launch, but Eric Berdinis, Uber Freight’s senior product manager, said “it’s attracted a really loyal following” of drivers.

“Our view is that if there’s 100,000 loads and there’s 100,000 drivers, there is some optimal way to put all of them together,” Berdinis said. “That’s best for the shipper. It’s best for the carrier.”

Uber isn’t the first company to enter the trucking-matchmaking app space. Companies like DAT Solutions and Convoy (the latter of which is backed by Jeff Bezos and Bill Gates) also offer matchmaking between shippers and carriers.  Since 2014, Cargomatic has offered an app that is similar, as has Transfix, which was founded in 2013, to say nothing of DashHaul and Napa. Calif.,-based startup DOFT, which curiously is billed as the “first Uber for trucking.”

But quality in execution has varied.

“They all suck,” John Anderson, owner of United Reuse, a business that schleps reusable industrial packaging, including hazardous materials, across the country, said of the hodge podge of brokers he’s worked with. Prices were inconsistent, delays recurring, and quotes were needed several times a day. “It was a huge hassle,” he said. “It was the worst thing ever.”

A key contrast between the world of cars and trucks is that with cars, consumers usually use a driver once, but in trucking, the relationships between shippers and carriers can be routine, Bart De Muynck, research vice president of  transportation technology at Gartner, said. That means that while Uber Freight can win some of the smaller trucking fleets, it also will need to snag some big clients—the Wal-Marts and Amazons of the world—in the long run to pose a serious threat to the industry overall.

“There’s a lot more to trucking than just driving,” De Muynck said. “That’s why most companies deal with just 10 or 12 companies who know their stuff and know what they’re doing. To replace that with a group of carriers, independent owner-operators, to replace those big players, that’s a big difference.”

Some shippers may engage Uber Freight in addition to a longstanding broker, as well. “Traditional brokers aren’t just sitting back there,” he said. “They are starting to invest more and more into technology, as well. They don’t want to be the Blockbuster as they see Netflix coming in.”

De Muynck sees a scenario in which Uber Freight grows, but so do all of its competitors, as the trucking pie grows overall, giving everyone bigger slices. “What we’re seeing is that there’s enough growth in the market that both traditional brokers can grow as well as these digital brokers,” he said.

Among the companies using Uber Freight is cranberry-juice juggernaut Ocean Spray, which started testing out the app about a year ago and is now slated to use the company for 3,000 loads in the next calendar year, Chris Domey, Ocean Spray’s senior manager of global logistics, said.

“I think the biggest challenge we have is meeting customer expectations for on time delivery,” Domey said. “There’s a lot of pressure to not deliver early or late, but to be right on time. There are penalty programs with our customers if we’re early or late and Uber Freight executed that perfectly.”

For all the criticism that Uber received for how it treated its drivers, in trucking, there’s hope that it can help alleviate what has long been considered one of the most overlooked and thankless jobs in the country.

Amir Shaw worked as a long-haul trucker for nearly 20 years and now sits on Uber Freight’s advisory board. A year ago, he began the switch from driving to recruiting drivers at Traveloko, and said he now uses Uber Freight to help try and lure drivers in and to stay in the industry.

When he used the app as a driver, Shaw said, it allowed him to pursue shorter-haul loads that kept him closer to home. He also booked his loads a week out, rather than day to day. “It was perfect for me,” Shaw said. “You could get stuck somewhere at 6 pm and call and call and call and no one would answer.” (Many brokers work from 9 to 5.)

Those small differences may add up, Santosh Rao, head of research for Manhattan Venture Partners, said. “Trucking is ready to be disrupted,” he said. “And in some ways, it already is.”