Uber Freight
freight.uber.com
freight.uber.com
Date: 09/14/2016
USDOT Number: 2926893
Legal Name: UBER FREIGHT LLC
Trucking is vulnerable to Uber. "More than 1 million smallish companies own 90 percent of all trucks, each owning about three trucks on average." That lets Uber be the master and the truckers the slaves, as with their taxi service.
Cargomatic claims 1,811,000 miles traveled. They launched in 2014, so that's under a million miles a year. That's nothing. The average delivery truck travels 12,000 miles a year, so, from their own numbers, Cargomatic represents about 80 trucks, total. They may be run over by Uber.
The biggest freight broker is C.H. Robinson Worldwide, net revenue about $2.2bn. They also organize ocean freight and air freight, which Uber isn't likely to get into because the players there are not small.
Freight brokerage is so fragmented that Uber could roll up the industry.
Their customers, corporations guarding themselves against risk want every checkbox checked and rechecked twice. That's why its no surprise they're not pulling off stunts here.
Depending on how they do the accounting for this it could be huge gains to the top line, something much needed to validate a $60bn valuation in the public markets.
http://www.trucking.org/ata%20docs/what%20we%20do/image%20an...
Port automation on the other hand, is an opportunity I'm guessing.
https://www.amazon.com/Box-Shipping-Container-Smaller-Econom...
Secondly, there's all kinds of regulations. A container vessel is operated 24/7. If 7 is the amount of people working on it at a time, in practice the crew will be twice that.
In any case, your response lacks a lot. The person you replied to talked about big boat shipping and how it is not going to be automated any time soon. You only account for the crew on a vessel. There's the customers (loads of which still like to send a fax), lots of outdated governments, outdated vendors, other companies, etc.
Another thing, crew size would be 3x of needed crew for one shift because in ships there are three shifts, one shift lasts in 8 hours.
(Source: I am originally Naval Architect)
https://en.wikipedia.org/wiki/Emma_M%C3%A6rsk
Still not a lot of fat to cut for a ship with the capacity of a medium size port.
And with all that gone, you could fit a lot more cargo on the same size boat.
"Where I come from, we call that slavery." - Wonder Woman.
…yet
It's going to be a spectacular, automated race to the bottom. The losers are going to be the 10 million professional drivers in the old trucking and taxi businesses.
Excellent! More efficient shipping benefits a lot of people. The problem isn't the increase in efficiency — are faster CPUs a race to the bottom because worse chip makers go out of business? — it's poor policy that fails to adequately compensate those who lose from this. We should focus on electing officials and supporting policy to turn these Kaldor-Hicks improvements into Pareto ones.
(I know you're not taking a stance against automation, I just think it's important to stress that the correct response is to make everyone better off by using some of the gains to compensate the losers)
Okay you need to understand that laws come with consequences. And if the consequences are not sufficient to deter an action, then the law does not exist.
Uber finds the consequences possible from state governments and smaller administrative authorities to be negligible. This is an accurate assessment generally due to predictable underfunded nature, deficits, lack of case law and lack of political will that these areas have.
The federal government is not any of that and has unlimited resources to ensure compliance. It also provides the benefit of supplanting state law, good across the entire republic and helps with reciprocal agreements in other republics. So there are both adequate consequences for noncompliance and adequate benefits for compliance.
State autonomy has been irrelevant since interstate commerce became the only form of commerce, and most of the time people are just playing along.
I received the Black Swan by Nassim Taleb for Christmas, and there is a lot of "disruption leads to winner take all" talk in the book. I don't necessarily disagree with Taleb, but it's amazing that our lives are dominated by only a handful of companies (I'm willing to bet 90% of our daily time will be attributed to using a product made by either Apple, Google, Microsoft, Facebook). Now, the aforementioned companies generally do require scale, so my assertion is a bit hyperbolic, but in Uber's case... does freight really NEED scale? I've never needed to order freight, so I can't speak from experience here, but it seems like the social cost to having Uber win all may be far greater than the benefits in efficiency. I can imagine a future where we arrive at a new Era of Barons and legislation is passed to break them up (ala Rockefeller, Vanderbilt...etc.).
Last but not least, we seem to be push for "Universal Income" as a means to assuage the pain caused by the Winner Take All economy, but I don't think that's fair to a lot of America. I think we should solve the problem in it's root before we talk about Universal Income- I don't mean to sound negative, but it just seems like a convenient cop out to the problems at hand.
Instead, we live in a society which is shaped by comleting self-interests. You're asking of freight NEEDS scale - for whose benefit? Ubers? Yes. His small scale competitors? No. Customers? We'll have to wait and see their verdict. All of us together? We don't have enough interests in common for this virtual entity to have any real meaning.
But the SV firms sure do seem to dominate the news (especially general business news) to the exclusion of all else.
People don't buy truck trips, they buy goods transportation. That means your company must at a minimum send stuff everywhere. Also, scale permits all kinds of cost-cutting that are the difference between failure and success on a low margin market like trucking.
About universal income, I'm curious how do you think people could solve the winner take all problem at its root.
-Do people own trucks or is it corporations/shipping-companies.
- What happens to all the various forms of taxes (are there any?) which come into picture during long distance transporation
- Is there a concept of toll tax on the roads. Who would be providing those?
- How do you ensure legality of contents and prevent illegal transportation of goods here?
- The USP of Uber is the being able to get the required service in a couple of minutes.Will this be applicable here?
- Uber has always been in grey areas when it comes to personal vehicles being used commercially to drive single passengers. Transporting goods would cause the same issues on a larger scale right?
On the website: It kind of sucks that you need to give an email id to get even basic information on what this is about[1].
Most trucks in the US are owned by individuals are very small companies.
I'm not aware of any taxes specific to interstate trucking. If you have a licensed and insured truck in one state you're good to go anywhere in the US. There are some slightly different regulations on trailer length and such, but there is a consistent baseline across the US.
There are toll roads but they're uncommon, especially in the middle of the country where most of the freight is moving. Those that do exist are fairly inexpensive and would be trivially easy to price in.
Carriers are generally not responsible for the contents of their cargo. If they accept a big 'ole pallet marked "cocaine" they're gonna be in trouble, but they're not required to ensure that the cargo matches the manifest.
LTL (less-than-truckload) cargo is generally delivered to your doorstep on a given day, not at a given hour.
Trucks are commercial vehicles, so insurance is going to be much less of an issue there.
Of the roughly 3 million trucks on the road, 10% are owner operators (a person who owns his or her own truck and drives it).
Those owner operators mostly drive around the country like chickens with their heads cut off trying to source loads to transport. The owner operators will work with freight brokers (middle men) who either scour load boards or have relationships with companies that need things shipped. Some of the owner operators have a significant other at home who does the sourcing of loads for them. Deadheading, driving to or from somewhere without a paid load, kills these drivers. These drivers make on average $50+k per year.
The pre-Uber taxi scene looked a lot like this national truck load scene does today. I imagine that's why Uber sees opportunity here. In the taxi scenario you have the supply (taxis) and demand (passengers). In the freight scene they'd have to link up the supply (owner operators) and demand (any company that has truck loads of freight to ship).
Disclaimer: this is a simplification of logistics, ignores 'less than load' freight, multi-modal, and fleet operations.
Source: I founded and ran a freight logistics startup in the 2000's. Developed a web app to try and do what I said Uber could above. It was designed poorly from an empathy standpoint of both parties and most importantly it was pre-iPhone/apps. We were a successful brokerage/consultancy but failed as a startup.
From this article
https://www.bloomberg.com/news/articles/2016-12-22/china-s-u...
Maybe the people who sign up will be similar to the type of people who sign up as Uber drivers--not your typical truck drivers..
for uber frieght : trucks are owned by companies, who will not work with uber, u need a special license to drive truck: these drivers will not work with uber.
who will work for uber freight?
Source: http://www.businessinsider.com/uber-to-launch-uberfreight-fo...
> UberFreight, which would not control the trucks it relies upon to move customers' freight, is building in only a 5-percent average margin for its net revenue per transaction, according to another person familiar with the matter. On average, net revenue, defined as the revenue a broker generates after its cost of purchased transportation, is around three times that for established brokers. UberFreight's other costs would then be subtracted from its net revenue threshold, leaving the brokerage business either to operate at break-even levels or be a loss leader for the San Francisco-based parent.
Source: http://www.dcvelocity.com/articles/20161212--uberfreight-ste...
Once Uber gets autonomous trucks everywhere they cut out the drivers and add that revenue to their margins while still under cutting everyone else.
Is that the gist of their strategy?
And it's also why Uber is probably running towards getting autonomous tech developed, because ultimately its a fight for it's survival.
In the mean time, they will run transport markets that need people to run it until that tech comes. And it could take 5 years to 20 years for all we know.
FWIW, I've dealt with firearms being accidentally shipped to Canada. They were on a freight dock in Toronto before anyone realized. We (the carrier) were levied a fine and we shipped them back to the US without further incident. Being that it was self-reported, they didn't even send someone out.
Uber has a boatload of cash. Why reinvent a wheel? uShip has a funding of $44.71M in several rounds according to crunchbase. Uber sure has a vast collection fine-tuned maps, but freight routes are different from inner city routes.
I'm not saying it's an easy problem, but it's a much easier problem. You also don't have to be as concerned with public perception, as you aren't asking a consumer to get inside of it.
they have to get it 100% all the time or they cannot put it on the road. One glitch and you have a 25t missile on the highway. Imagine the chaos that can cause, and imagine the liability of the company operating that truck.
while it is easier in ideal conditions, it is not easy in real world.
But I'm not sure it makes any difference. You aren't "supposed" to find pedestrians in a road, but you'll certainly find them, and the truck must be able to deal with them.
there are other examples where trucks avoided certain deaths for car drivers in that they served left or right. and escaped car or pedestrians.
http://www.businessinsider.com/trucking-industry-infographic...
why are trains, especially freight, not being automated?
seems like a far simpler problem than autonomous cars, no?
just seems very odd that no one from the big ones - Siemens, Bombardier, etc would go after that. Not even in Japan or China, both train heaven.
Wonder if this has even registered on their radar
I have another friend who is a truck dispatcher. Her entire job is telling truckers where to go and when to be there. Trucking companies don't need to employ dispatchers any more, Uber's algorithms handle her entire job.
My uncle drove trucks delivering dairy to grocery stores. Since he was a member of the dairy trucker's union, that was the only thing he was allowed to deliver. If there was no dairy to deliver but lots of bread, sorry, that's for the members of the bread trucker's union. The whole trucking industry is carved into these niche unions which are really frustrating to deal with.
When I was a student, I worked for a construction company that had a decrepit old truck they used to deliver some of their prefab pieces, like sets of windows and doors. It broke down a lot and only one guy in the shop had the license and knew how to drive it. Now they can get rid of the truck and just hire Uber whenever they need some bigger stuff delivered.
I don't see anything new here though. It's just a matter of them making the same-old-thing more convenient (which is basically all the Uber car service is).
Every market has a variety of players (shippers, carriers, brokers) in the game which brings volatility to pricing and where brokers can find arbitrage opportunities to earn themselves additional revenue.
The business is also cyclical, seasonal, meaning again highly volatile and the reliance on the brokerage model to maintain continuity in the marketplace.
Past the pricing level there's also multiple levels of bureaucracy to manage. Everything from documenting and confirming loads, rates, BoL, LTL, CoC. Lots of which is still manual and tedious on purpose.
Then you finally get to the scheduling, dispatching, and invoicing, which is Uber's area of expertise.
To play, Uber needs to tackle all three levels. Re-build the software layers, re-build the processes, then throw in from their deep pockets to take over territory one by one.
I run the logistics for a FMCG company, and we own a small fleet, which delivers all over the UK and occasionally into Europe. Most of the time, we return to depot empty. We don't have the resources to act as a transport brokerage in addition to selling our own goods. At present we use returnloads.net and TimoCom, and have a close relationship with a couple of local transport brokers. We place the times and locations of our vehicles into their systems and occasionally get a response. We work on very small timescales (1-3 days) of planning, so it's not easy to find return loads.
We also use transport brokerage firms ourselves when we're busy and selling more than our fleet can handle, or if we're shipping out so far that it's not cost effective to put on our own vehicles. Pricing here can vary massively, where if we can manage to find a return load, it's usually at half the cost it would be to contact a standard shipping firm.
I can't see Uber Freight being any more useful than returnloads.net, but if it turns out to be, then I could end up being a provider and a consumer.
Letting one company control the autonomous driving market seems pretty bad for competition.
Udacity also has a course just for making a self-driving car, and you get to use a real car.
https://www.udacity.com/course/self-driving-car-engineer-nan...
I suspect that as they have to deal with real companies, with lawyers that do due diligence things won't be so smooth.
Delivery is business critical to most companies, so Uber are going to have to make a pretty strong pitch to get business.
I'm not sure who they are pitching at, companies that do lots of hauling will have decent relationships with haulage broker/companies directly. They'll do credit and guarantees.
The other thing is that I'm strongly suspicious of Uber business practice, as they appear they'll do anything to make a quick buck. (drop drivers, jack up prices, lie, cheat and generally break the law)
That's not something that I want when shipping business critical stuff. "oh sorry, the surge price on the haulage has changed, conference season you know..." or "we've dropped that subcontractor, we're sorry your pallet appear to have been lost"
For those companies if your vendor doesn't have an existing relationship with a freight broker familiar with things you're in for a huge waste of time and a confusing mess where you feel you're likely being ripped off.
If you could instead spend 5 minutes typing some stuff into Uber and clicking go it wins that market segment every time.
We were this company until we got a bit larger and now have a relationship with a broker. But even now it's a little antiquated.
> That's not something that I want when shipping business critical stuff. "oh sorry, the surge price on the haulage has changed, conference season you know..."
This already happens, as anyone shipping throughout the year will attest to. Rates are a lesser form of airline pricing.
> or "we've dropped that subcontractor, we're sorry your pallet appear to have been lost"
Trivial non-problem that again already exists in the market. This has happened, and it's just as rare as you'd expect it to be.
> They'll do credit and guarantees
Why wouldn't Uber? Considering their performance here in the consumer space I would expect them to be easier to work with here than current brokers who rely on that $200 to feed their kids that week.
Can confirm, lot of Uber's web infrastructure is modeled around React