[blaincate]

There is a fundamental problem with uber freight : availability of trucks. In case of the uber taxi, most of US population owns the car and drivers working for uber already had a license.

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?

[ssclafani]

> The way most shipping works for most companies today is by going through a brokerage firm, which makes calls to trucking companies and arranges the best deals for its customers. The broker takes a commission of between 15 and 20%. To start, the Uber Freight marketplace will eliminate that middleman and offer shippers real-time pricing of what it will cost to move their goods based on supply and demand.

Source: http://www.businessinsider.com/uber-to-launch-uberfreight-fo...

[aqme28]

By "eliminate that middleman" do they mean "become that middleman"?

[ssclafani]

Yes. Uber Freight is basically a freight brokerage that's being operated at break-even levels:

> 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...

[shostack]

So if I'm understanding it properly, they are offering drastically lower prices by cutting out the broker and passing on the savings, but still need the truckers and the truckers will be forced to use them because that's where the jobs will be (not sure if they'll see any pay boost or if it will just be customers seeing savings).

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?

[mahyarm]

I think Uber realizes if someone else has autonomous tech first, that company will cut out the drivers and they will all be out of jobs. So either way, it doesn't really matter who does it first.

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.

[bdcravens]

Uber isn't the first to do this with software (though they may be able to undercut companies that do)

[true_religion]

Uber started as a limo company, competing with specially licenced drivers working for small businesses. They are into that market. I see this as comparable to what they will do to the trucking industry.

[bdcravens]

I don't know they can make a similar turn in freight, going from expensive vehicles and highly licensed to a lower cost, low-end option.

[mastazi]

it seems that in the long term their low cost option is going to be autonomous trucks, e.g. https://www.wired.com/2016/10/ubers-self-driving-truck-makes...

[danvasquez29]

The drivers will go where the work is. If Uber lets them utilize their truck more often and/or with more certainty, and pays them on delivery without them having to send out invoices and wait 30+ days, then they'll drive for Uber instead of their local brokerage.

[nstart]

I'm pretty sure Uber has done their research into how to make this work. It's probably not a question of whether they can solve this, it's most likely a question of what they've already done to solve it. This announcement is probably them just getting ready to open it at beta scale. Pretty sure this isn't an MVP esque landing page where someone said "what if we did Uber for freight?" (just want to make it clear that those are my words and totally not what you said :) ). My guess is that Uber already has a list of small partners they've manually brought on. If history is any indication, they'll do whatever subsidizing they can to own this market.

[LyndsySimon]

By the numbers, the vast majority of trucks in the US are owned by small companies.