Uber grows trucking service
Edwin and Minnie Gilmore opened their own trucking company, Gilmore & Long Enterprises, a couple of years ago after Edwin had put in decades driving for other companies. Now he drives his Freightliner Cascadia cab with a 53-foot box trailer throughout Texas, Louisiana, Arkansas and Mississippi, while she handles bookkeeping and dispatching from their Katy, Texas, home.
Finding freight for him to haul involves looking at “load boards” online, calling brokers, negotiating rates, and seeking to match up inbound and outbound loads, a process that might take close to an hour each time, Minnie Gilmore said. But since March they’ve been trying out Uber Freight, a service from San Francisco’s Uber that connects truck drivers to loads, much as the company matches Uber drivers with passengers. The Gilmores can simply look at the Uber Freight app, view loads with set pricing, and select one that matches Edwin’s preference to stick to about 600 miles from home.
“It’s pretty seamless, although for now the (load dispatchers) still seem to want to call from time to time; they’re not quite ready to turn you loose without call checks,” Minnie Gilmore said. Edwin has hauled about 30 loads dispatched by Uber Freight.
Uber’s been testing Freight since May, largely in Texas. On Thursday, it said it would expand to new markets, including California, Arizona, Chicago and the Midwest, Georgia, North Carolina and South Carolina. Uber Freight will now cover more than a
quarter of U.S. drivers and freight, the company said. Uber Freight is also adding more personalization features to the app so it can suggest loads to drivers based on their preferences.
“We are growing at an Uber-like pace, tenfold since the beginning of the year,” said Eric Berdinis, Uber Freight product lead, while not offering more specifics. Most users are small trucking companies — in fact, the majority of U.S. truck firms have fewer than six trucks — but the company has seen some interest from larger fleets “that want to make sure truckers have full transparency of price and destination,” he said.
Shippers run the spectrum from mom-andpop operations to Fortune 100 companies, Berdinis said, declining to name any.
Uber Freight — which Uber itself calls “Uber for trucking” — shows the ride-hailing company seeking to broaden its sources of revenue by applying its data science to new industries. Trucking is an $800 billion-a-year market that still relies heavily on faxes and phone calls; it seems ripe for someone to sweep in with an app interface and smarter allocation of vehicles. Uber isn’t the only tech company eyeing it. Cargo Chief, Cargomatic, Convoy, Fleet, Flexport, Freightera, Freightos, Haven, Transfix and TruckerPath are just some of the venture capitalbacked companies seeking to revamp back-end operations for the freight industry.
“Uber Freight is a logical extension of a lot of stuff Uber’s built for consumer rides in matching drivers and customers,” said industry analyst Jan Dawson from Jackdaw Research. “Obviously, this is different business, but it feels like they’ve done a good job of understanding the freight/ trucking market and the value they’d add, and how to streamline the process of connecting drivers and cargo loads.”
Uber Freight makes money through an arbitrage-like system. It negotiates rates, often via long-term contracts, with shippers. Then it prices individual loads based on market dynamics — similar to its wellknown surge pricing for rides when demand is high. It pockets the difference between longterm contracts and spot rates.
Uber’s rates seem a little higher than other brokers’ rates, Minnie Gilmore said — which implies that for now Uber may be using some of the billions of dollars of cash it has raised to subsidize this new venture. That’s what it’s done in ride-hailing, where it often gives drivers big recruitment incentives to jump-start the rides market in a new city.
Another selling point for truckers: Uber pays drivers quickly, rather than making them wait for 30 days or more, as is typical in the industry. Minnie Gilmore said she hasn’t yet used that feature, as she’s signed up with another service that provides quick payments — but charges her a 3 to 5 percent fee.
Expansion makes sense for obvious reasons. “The more they spread, the more attractive it becomes for drivers to use it for all trips, not just the occasional trip,” Dawson said.
“It’s still not enough volume to keep (Edwin) busy all the time,” Minnie said, but she can see that as Uber Freight ramps up, they could use it exclusively.
Berdinis previously worked at Otto, the selfdriving truck startup Uber acquired last year. While that deal led to a lawsuit from Waymo claiming that Uber stole its intellectual property, Uber Freight is not making use of self-driving technology — although that could change.
“Both are equally viable paths to transforming transportation,” he said. “I can definitely see that there could be convergence.”
Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@ sfchronicle.com Twitter: @csaid