Uber's path to profitability may not come from personal transportation at all. Instead, trucks might be the answer.
The trucking industry drew in revenues of $796 billion in 2018, with trucks moving 71% of the nation's freight, according to the American Trucking Association, a trade group. Compare that to the global ride-hailing market, which according to Allied Market Research, was valued at just $36 billion in 2017.
Uber is now a player in this market with Uber Freight. Uber Freight launched in 2017, and the program has since expanded to 48 U.S. states, as well as the Netherlands and Germany. Uber says thousands of shippers and almost half a million truck drivers currently use the platform.
"I think Uber senses that the logistics industry has a lot of growth potential. It already has grown quite significantly since the dawn of the package delivery boom with Amazon at its heart," says Michael Ramsey, a senior research director at Gartner who covers the automotive and smart mobility segment.
Typically, shipping companies would use freight brokers as a middle man to match them with available truckers, taking a commission in the process. Uber Freight removes the need for a middle man by allowing truckers to choose from a list of available jobs and the routes that they would need to take to complete them. Drivers also get information on what they are hauling as well as how much they'll be paid. Once they make their delivery, the truckers can find their next job right from the app. Earlier this year, Uber Freight also launched a desktop portal for larger fleet operators.
Says Ramsey, "People who on the supply side, if they're truckers who want to operate their own business or want to get outside, have more flexibility in the same way that Uber drivers do as cab drivers. They can use that platform to have a lot of flexibility and run their own business. And then on the demand side, the people who wouldn't otherwise ship things have access into that market a little bit more easily."
Watch this video to find out other ways in which Uber Freight is changing the trucking industry and to find out if the division can help make Uber profitable.