A driver looks at the Uber Freight app. (Uber Technologies Inc.)
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Uber Freight, the load-matching business unit of Uber Technologies Inc., announced it has opened its new headquarters in Chicago and plans to hire 2,000 employees over the next three years to handle engineering operations, sales and account management for its operations here and overseas.
Uber Freight, launched in May 2017, automates trucking transactions through a mobile app designed to make it easier for carriers — especially owner-operators and small fleets — to quickly find and book loads that match their preferences.
The company has scaled across the U.S. and expanded recently into Europe. Today, it counts more than 400,000 drivers in its network and 1,000 shippers as customers, including AB Inbev, Niagara Bottling, Land O’Lakes and other Fortune 500 firms.
Uber Freight also maintains offices in San Francisco and Amsterdam.
“Trucking represents an enormous opportunity for Uber, and this milestone is a testament to our long-term commitment to our freight business,” Uber Technologies CEO Dara Khosrowshahi said in a company release.
“Chicago is the heart of America’s transportation and logistics industry, and there is no better place to open our dedicated freight headquarters,” he added. “Uber has long recognized the incredible history, innovation and talent that Chicago has to offer, and we’re excited about the thousands of new jobs our freight business will help bring as we become one of the city’s largest technology employers.”
Uber Freight’s plans also call for spending $200 million annually on staff, real estate and other expenses in Chicago, where the company has signed a 10-year lease for space in The Old Main Post Office in the historic Chicago River area.
The announcement comes as Uber Technologies reported, separately, that in the past three years it has created hundreds of thousands of work opportunities for rideshare drivers and food delivery couriers, and has hired more than a thousand local Uber employees in Chicago —and brought more than $1 billion into the local economy through driver earnings.
Meanwhile, owner-operator Chad Boblett, who started a Facebook group called Rate Per Mile Masters that has almost 28,000 members, posted that, for the first time, multiple owner-operators are telling him that they are getting more than 80% of their business with Uber Freight and Convoy, also a digital freight broker.
“Here’s the point, the biggest complaint regarding these apps is that the loads are on the cheap side; however when all freight is cheap, then an app that is not going to play games and that has standards is more attractive,” Boblett wrote.
At the same time, Echo Global Logistics, a Chicago-based broker started in 2005, is not ready to count the incumbents out, an analyst with Cowen Inc. wrote. At least half of its less-than-truckload shipments are booked through its online portal.
Echo Global Logistics ranks No. 38 on the Transport Topics list of the 50 largest logistics companies in North America.
An analyst with Stephens Inc. reported net revenue per load within the brokerage market is likely to face headwinds over the next couple of years as market participants vie for market share within the for-hire truckload market.
“While the investor community has been acutely focused on the potential disruptive impact of digital brokers for several years,” he wrote, “our sense is that operators and shippers are now much more focused on the impact that these players are having on market pricing.”