CSCMP's Supply Chain Quarterly
January 21, 2019
Forward Thinking

Uber Freight seeing rational pricing in brokerage space, unit's head says

Driegert calls market 'very competitive,' says he's satisfied with unit's positioning.

Uber Freight, the freight brokerage arm of ride-hailing firm Uber Technologies Inc., is pricing its broker services competitively and is not looking to undercut other brokers as many thought it would do, according to the unit's head.

Bill Driegert, director of the San Francisco-based unit, said pricing in the brokerage market is currently "very competitive." Uber Freight is pricing its services in a "reasonable" manner vis-à-vis the competition, Driegert said on the sidelines last Thursday at the Home Delivery World annual conference in Atlanta. Driegert added that he is "very pleased" with the way the unit's rate structure is evolving, and how it is being received by the marketplace.

Since Uber announced its plans several years ago to create a freight brokerage unit that would digitally connect shippers, fleets and drivers without the need for a traditional third-party broker, there have been concerns raised that the unit would use its advanced technology to underprice most brokers.

After launching in Texas last year, the unit is now operating nationwide, Driegert said. Most importantly, the unit won the seal of approval of new CEO Dara Khosrowshahi, who replaced Travis Kalanick, Uber's founder, last August during a period of intense internal turmoil at the company. There were concerns that the development of a freight unit might be curtailed or killed because it would be considered a distraction for Khosrowshahi in light of the major cultural problems at Uber and an IPO still lined up for 2019. However, not only has the new CEO green-lighted the unit's growth, but he has allowed it to operate "with a lot of autonomy," Dreigert said.

Driegert did not offer any new information on Uber's work in the autonomous truck space. Last month, an autonomous Uber vehicle hauled a load about 344 miles between two points in Arizona before the load was transferred near the California border to a traditional driver for the final leg to southern California. The vehicle was part of the fleet owned by autonomous truck startup Otto, which Uber acquired in 2016 and whose name has since disappeared.

Driegert is trying to shed Uber Freight's image as a digital load-matching service and is focusing on creating a fuller experience for fleets and drivers. For example, the unit has a service called "Take Me Home" designed to help drivers find loads that return them to their home bases. The unit has introduced a line of fuel cards with price discounts, and is offering discounts on such equipment as tires.

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