• ITVI.USA
    15,529.670
    -8.590
    -0.1%
  • OTRI.USA
    25.060
    -0.050
    -0.2%
  • OTVI.USA
    15,490.640
    -7.950
    -0.1%
  • TLT.USA
    2.720
    0.020
    0.7%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
  • ITVI.USA
    15,529.670
    -8.590
    -0.1%
  • OTRI.USA
    25.060
    -0.050
    -0.2%
  • OTVI.USA
    15,490.640
    -7.950
    -0.1%
  • TLT.USA
    2.720
    0.020
    0.7%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
LogisticsNews

Key 2020 target for Uber Freight already reached: CFO

In brief comments about the future of digital broker Uber Freight, the CFO of the parent company said the division already has hit its year-end targets on cost per load.

At the Citi 2020 Global Technology Virtual Conference held earlier this month, CFO Nelson Chai said Uber Freight has “really improved” its cost-per-load metrics but did not disclose any details.

“The company has done a very good job internally in terms of managing that down, actually achieving what the year-end targets are already,” Chai said in response to a question from Itay Michaeli, the U.S. auto and mobility analyst for Citigroup. 

Uber was reportedly looking for investors for its Freight division earlier this year, though that subject was not part of Chai’s relatively brief remarks. Michaeli did preface his questions by asking how the company views Uber Freight, “balancing growth investments there with the company’s objective of reaching EBITDA profitability at some point next year.”

Chai did seem to suggest there were long-term questions about where Uber Freight fits within the company, which has made it clear that investment in its delivery service — the former Uber Eats that soon will be supplemented by its Postmates acquisition when that closes — is the growth path for Uber along with ride sharing.

“In order to really get towards profitability, you have to have route density and you have to have a good efficient market on both sides of this,” Chai said. “The team has made good progress.”

But he acknowledged that Michaeli was “right to call out the fact that is not a consumer-facing business unlike the other businesses.” 

“Over time, this will be a continued question we’ll have,” Chai said. “The team is making progress today.”

In the company’s most recent earnings report, Uber Freight posted revenue of $211 million in the second quarter. That was up from $167 million in the second quarter of 2019. EBITDA for the segment in the quarter was a loss of $49 million, marking a slight improvement from negative $52 million in 2019’s 2Q. Uber Freight’s EBITDA in the first quarter was negative $64 million.

Chai said Uber Freight would record “a little less” than $1 billion in revenue this year. Revenues last year were $737 million. 

The CFO described the way the trucking market works like this: “You go lock in your enterprise customers upfront, and that gives you scale. And then you make money on the spot. And the challenge right now is there’s a real supply shortage for drivers right now, and so the spot is getting pretty tough. It’s an aging demographic of drivers.”

It’s a market he described as “interesting,” as there is “actually a fair amount of demand and a big supply shortage. And so what that means is that volumes can be very good, but the gross margins are tighter or tougher.

“We think that it can be a big business over time,” Chai said. But he added that Uber will continue to have an “aggressive” internal discussion on Uber Freight. “We like the progress in a very tough market right now.”

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.

2 Comments

  1. > But he added that Uber will continue to have an “aggressive” internal discussion on Uber Freight.

    What is the benefit of the CFO and CEO continuously hinting that they are thinking about shutting down or selling the freight business? I don’t get their strategy. It must be difficult working at Uber Freight with that going around.

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