On the surface, the ‘uberification’ of freight seems like both a natural progression in a tech-enabled world as well as a bit of a no-brainer. More intelligently matched fleets with clients, faster and with more streamlined payments? So far so simple and not a great deal to write home about. That is, until you delve beneath the surface to find out what’s really happening and how it looks set to change the face of freight.
The birth of Uber Freight
While Uber’s global expansion has been rapid it has grown organically. Infrastructure hasn’t been an issue in the private hire market as most drivers sign up to the service with their own cars and they have focused on the lucrative city market where there is plenty of demand.
The freight infrastructure is different. The company needs to access a large number of tractor-trailers from the get-go to establish a working brand. It also needs volume to be able to provide its service which will, like the private car market, be based on having transportation available quickly and at the right price.
So Uber’s first step has been to buy into the existing freight market with the acquisition of self-driving truck company, Otto, for $650 million. With its focus on self-driving trucks, Otto is giving Uber not just an entry into the trucking space but an entry into the space that is arguably ahead of many of the major competitors.
The future of freight is automated
Discussions about self-driving cars are well underway with increasing numbers on the roads already having some degree of intelligent co-piloting systems, from self-parking to full self-driving capability.
Aside from Uber, there are a number of start-ups looking into the self-driving freight vehicle. Peloton Technology automates safety systems between pairs of trucks; Embark has launched technology to combat driver tiredness and Einride has created a remote control electric truck prototype.
With its acquisition of Otto, Uber not only has access to a ready-established trucking operation but one that is already making inroads into the self-driving truck universe. However this sector pans out in the future, it already has wide-ranging implications for the freight sector.
Automated and self-driving fleets are not quite the same thing. Automation removes a number of tasks from the driver from parking to systems monitoring to security and communications while self-driving takes away the physical need of the trucker to drive the unit.
As with self-driving cars, in fleet this raises questions about driver distraction and responsibility. Manufacturers and OEMs will be keen to find ways to resolve these issues because there are also huge benefits to automating the drive process. In freight, we might come to think of the driver more as a pilot and transport manager, maintaining systems, monitoring goods in transit and being present during more complex manoeuvres.
Self-driving units in these stages could dramatically reduce the amount of driver fatigue. More tractor trailers could be attached to a single unit, creating more efficient road trains for larger loads. Units themselves can be driven within precise parameters to maximise energy usage and minimise spend. All of this streamlines operations for fleet owners and reduces cost – for them and their clients.
Tomorrow’s benefits today
While the automation and self-drive capabilities are in-market in the freight sector, they remain at a very early stage. Uber, and similar companies such as Convoy, will be wanting to make returns on their investment today.
In reality, most of the advantages of an Uber approach to freight come from the company’s existing capabilities in terms of digitisation, crowd sourcing and efficiency.
Uber Freight brings drivers and vehicles on board via its database and matches them up with loads needing shipped. While they are shown compatible loads, they have the opportunity to pick and choose the loads they are happy to take.
Uber also cuts out the element of negotiation with a fixed pricing structure and is also bringing its controversial surge system where trips become more costly dependent on demand.
Pooling resources in this way should mean more timely deliveries for clients, lower energy usage resulting in both cost savings and environmental benefits as well as less wear and tear both on drivers and their units.
Cloud-based brokerage systems such as Uber’s and Convoy’s do have clear benefits for both freight manager and client. Pricing is transparent and automated, taking personality clashes and partisanship out of the equation. It allows loads to be matched and in time we may see several client loads of similar type and destination batched together to allow a single skilled driver to accompany the lot, rather than a specialist driver for each truck.
There will undoubtedly be ramifications, particularly for drivers. Automation and self-drive will take a great deal of the repetitive and low-skilled operations away from truckers. While we are unlikely to see fully-unmanned freight crossing the country, in the near future at least, drivers may find themselves fulfilling other roles and will need upskilling – or replaced – as a result.
When Uber Freight launched in May 2017, its then CEO, Travis Kalanick was reported as saying to Business Insider that it would be a “challenging, interesting, nuanced business.”
Freight is a sum of many more parts than personal car hire and one with deep set legacies across both its technologies and culture. The established Uber brand may be what is needed to bring the sector into a more technological age but it won’t necessarily be guaranteed a smooth ride.