Bill Driegert believes that the coronavirus pandemic is accelerating an irreversible digitization of the transportation and logistics industry, and that shipper behavior, technology adoption and network design will enter a “new normal” after the crisis.
Tuesday afternoon, Driegert, Uber Freight’s co-founder and head of operations, appeared on FreightWavesTV during a wide-ranging coronavirus update for the transportation and logistics industry.
“It’s a once-in-a-lifetime event that has been incredibly disruptive, and there’s a lot of uncertainty,” Driegert said. “We’ve seen shippers change plans on a weekly basis.”
While Uber’s Rides business is down 80%, the Freight business was in a unique position to respond to the crisis. Since the crisis began, Uber Freight has moved more than 30,000 relief loads, a portion of which were moved for zero profit. For specific humanitarian projects, like moving personal protective equipment (PPE) with Salesforce, Uber Freight has even covered the cost of transportation.
Addressing Uber CEO Dara Khosrowshahi’s letter to employees and the notion that Freight was being “reevaluated,” Driegert emphasized that nothing was changing about Uber Freight’s product road map or service offering, and suggested that the impact to Uber Freight was about further adjusting its path to profitability.
Driegert said Uber Freight’s technology platform has allowed it to adapt quickly to the dynamic freight environment, which saw truckload volumes spike to historic levels in March, collapse through mid-April, and then start to normalize as businesses and communities return to work.
Uber Freight’s platform designated which loads offered to carriers qualified as coronavirus relief under the Federal Motor Carrier Safety Administration’s guidelines, which waived hours-of-service regulations for qualifying freight. That allowed carriers to make quick, informed decisions about market pricing and their own productivity, and empowered them to help out with relief efforts.
On the shipper side, Uber Freight’s recent work in integrating its application programming interfaces (APIs) with important platforms like Oracle and BluJay has paid off. APIs allow software to pull information from databases over the web in an automated way; customer calls into Uber Freight’s market pricing APIs have increased 150% since the pandemic began. Shippers want instant rate data and instant execution, which has become more important now that they have less clarity into consumer demand and their own production capacity.
“We don’t expect markets to return to the same place they have been before,” Driegert explained. “Technology expectations have changed, networks have changed, and we’ve seen fundamental changes in how shippers operate in the market. We’re going to return to a new normal.”
Driegert said that while no one could predict exactly where freight markets would head from here — though he did note that volumes in Uber Freight’s European business, which operates in the Netherlands, Germany and Poland, are “normalizing” — shippers are undertaking strategic reviews of their supply chains.
“All of our shippers and those who had extreme disruptions, everybody is looking at that right now: making changes in sourcing strategies, where they place facilities, and their network design and topology,” Driegert said.
As for the rest of 2020 and 2021, Driegert said he expects Uber Freight’s tailwinds to continue blowing: changing shipper expectations and volatility-driven demand for data and instant execution.
Miguel Yolo
There’s publications already about Uber assessing Uber Freight’s long term viability. 150% increase while sounding nice may be all for naught if it gets axed.
Art
“Moved loads at no profit and for free”… not for charity nor goodness of their heart.
Desperate attempt to get foot in door.
Scamming investors they are different from the hundreds of other truck brokers.
Good one!
Just keep on burning that venture capital money while you can!
Disrupting the freight industry.
LOL just like every other broker…
Uber Kyle
So I guess “Uberization of Freight” was actually what they did. Uberization in this case means “lose lots of money” and then fall apart. Lol!!!!!
William Torres
Uber Freight is going downhill is maroon time
Remy
I thought Lior Ron was the Uber Freight head? I know he left once, but he came back to Uber at one point after leaving. Has he left again?
Ben
Remy, he was head of Otto that was called Uber Freight. Bad naming. The actual freight part has always been Driegert.
Big Joe
No, not really – in truth Driegert is not a founder or even co founder, or let’s put it like this, there are about 10 people who claim founder status with Uber Freight and Driegert just recently claimed that, you’ve got the guys that left to Turvo, etc, etc. Doesn’t really matter.
Joe
What a ridiculous interview – API calls up 150%? Ya, when there are 100 API calls a day, not to hard to get to 250 a day. Let’s face it, they have and continue to buy 90% of their business at unprofitable levels. Now people think Convoy should purchase them? Great, does a negative + negative = positive? The story is getting old and boring.
Rolando B
Yes. uber freight is done. People are quickly leaving as I have noticed in applications to our brokerage. I don’t think Convoy or other tech players would purchase them. If anything, I think it would be the legacy players like Coyote or CH who wants to catch up.
Dave
Annd shippers will switch in a heartbeat. It’s all about lowest rate with them. They don’t care who the brand is as long as the price is the lowest.
Jake
I wont use the cheapest carrier I am loyal to the carrier’s I use. ODFL has Not Damaged a skid in three years but I pay top dollar. My replacement cost for my product is way too expensive to put in any other LTL companies hands. TL I use pioneer logistics out of NJ and they pickup same day and deliver when and where i want. Again if i want to pay uber to get a truck to CA in 5 days fine but if i need it there in 3 pioneer will get it there in 2 with a team. Yes 2 days but it cost money. Its never about the cheapest carrier if you actually care about your customers. Yes profit is important but when you pay bottom dollar you get bottom service,.
Red
Someone is salty. Sounds like Uber Freight may be eating your lunch. Time to get with the times. I think we got some old school brokers here in the comments who are running scared.
Andrew S
^ Pretty sure I know at least one old school broker who is obsessed with Uber Freight.
Art
What is UF doing tgat is revolutionary vs Echo, Coyote, CH?
Same old manual truck brokering, with a “trendy” brand.
Joe
I think all brokers should fear any company who can invest and buy volume at negative margins, I don’t think it’s just a fear Uber thing, it’s the huge capital reserves these guys have. When you boil it down, here is nothing from a technology standpoint they are doing that another broker can’t claim / get via white label technology available. We have a DFM, ditto. We track drivers via GPS, ditto. We do round trips, ditto. etc, etc.
Ben
They came out of Q1 with almost a billion dollar run rate. I think you are wishing they had that little business.
JOe
Ben, are you Red also ahahahahhaha. Run rate all you want, total NM on their business is sub 2%, no broker wants that business nor do they want to be the ones to tell P&G they weren’t going to take their award. Like Uber Freight.