The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
In late 2017, when Uber announced “Freight,” I was about to build a digital freight brokerage, one with a very different focus but in the same pool. In the 2.5 years since, I have had a front row seat for the impact – first selling against them, and now helping companies with their digital transformations.
Before everyone starts celebrating the possible demise of Uber Freight hear me out.
Uber getting out of “Freight” is bad for freight.
I understand all the arguments about why Uber is bad for freight. I agree with some. What is lost is that the money and their prestige are EXACTLY what makes Uber uniquely situated to help our industry.
The industry needed the push (and still does)
The economics of this industry are not sustainable; but in late 2017 few felt a need to change. Uber Freight’s entrance showed how improvement has become the only path forward and helped transportation companies, shippers and Wall Street understand what needed to change, and the spark to start. CarrierDirect and I have seen first hand how the attention paid to freight tech changed almost overnight… from the inside. Providers went from “meh” in late ‘17 to “help me get started” by early ‘19.
To be clear – Uber didn’t invent “Uber for Trucking” just like Tesla didn’t invent electric cars. However, the spotlight on Tesla pushed electric cars from the concept-car stage to the road because suddenly the industry had an imperative, and an ecosystem (more on that later) for change. Before Uber Freight, J.B. Hunt was already working on 360, and C.H. Robinson had bought Freight Quote. Hunt, Robinson, and others deserve a ton of credit for looking through the windshield and trying to be different when most didn’t – they just didn’t need Uber for the idea. Uber increased the stakes, drove the imperative, and undoubtedly helped get the buy-in for what companies wanted to work on.
Beyond technology, the infusion of “Silicon Valley” to freight shined a light on everything inside the four walls of transportation providers – from organizational structure to process improvement. As an example – a core tenet of startups – “start with the customer at the center” has made its way to freight and we have seen that change the conversation with our customers. As Uber Freight has gained its footing, trucking companies and intermediaries are feeling the pressure to put their customers (shippers, BCOs and, for third-party logistics providers, PT carriers) at the center of the buying journey. Peter Rentschler, CEO of CarrierDirect, observed that while rarer than before, an integral part of several projects over the last year or more have focused on this customer experience.
Especially with the current economic and freight environment, we need the challenge that Uber brings to freight.
Make freight sexy again (MFSA)
In the same way Uber has spurred the industry to action in ways that others did not, it gets eyes on the industry in the way others just don’t, and has brought the ecosystem to change. Uber’s involvement in the space was able to ‘Make Freight Sexy Again’ in the eyes of investors and talent.
Believe it or not, the money in Uber’s war chest is actually HELPFUL. First, it is part of what allowed companies to effectively sell the need to invest in technology – adapt or die. By Q1 2019 venture deals outpaced the deals in ALL of 2017, enabling startups to enable legacy providers. Shelley Simpson of J.B. Hunt has spoken clearly to the market since the inception of 360 – invest today, profit tomorrow. Instead of “who needs that in freight,” the market has come to understand this investment is about defensibility. The “low margin future” we have all heard about for the last 10 years was here, even if it was artificial and, in essence, Hunt sold the vision to the market.
The Uber “factor” has also been an MFSA for talent, too. We have some incredible leaders in the industry (like the aforementioned Shelley Simpson); we just need more! We need more visionary leaders who will continue to push the industry forward. The first step is we need more talent to CHOOSE freight – not just engineers but sales and operations, too.
Uber elevated the profile of the industry to talent. Here’s an example – because of the recent layoffs, Uber put together a “talent board” for severed employees. You can go on, search for talent, and be connected. I looked at a Business Analyst from NYU’s school of business who had interned at Bloomberg. He picked a job in freight because of Uber. This has created the ecosystem, and these folks will help all of us shape the future of freight to be a better one.
Without Uber, the spotlight diminishes. Before you go dancing in the streets at the prospect that Uber might shut down Uber Freight, remember that it may be the competitor making us all better.