Uber is opening a new office in Chicago that will be the headquarters of Uber Freight, its logistics division known for its digital freight-matching brokerage app.
“Trucking represents an enormous opportunity for Uber, and this milestone is a testament to our long-term commitment to our Freight business,” said Dara Khosrowshahi, Uber CEO, in a press release.
Uber noted that over the last two-plus years, Uber Freight has grown across the U.S. and into Europe, with more than 400,000 drivers in its carrier network and more than 1,000 shippers as customers, including Fortune 500 companies such as AB Inbev and Land O’Lakes.
Uber established Chicago as one of its key business centers early on. Uber Freight already has about 1,000 employees in Chicago that will move into the new HQ, and starting next year, it will begin onboarding an expected additional 2,000 employees over the next few years. It has pledged a $200 million investment annually.
As Business Insider points out: (paywall)
“Uber Freight has gobbled up an impressive amount of market share since it launched in 2017. Its $359 million in bookings last year made it one of the 30 biggest brokerage firms in the US. (On the other hand, that's only 0.1% of the entire brokerage industry.)”
Nevertheless, the division of Uber that includes Uber Freight lost $193 million in the first half of 2019, BI reports.
“Digital freight brokers like Convoy and Uber Freight have much lower profit margins than those of traditional brokers. Bart De Muynck, the vice president of research at Gartner, told Business Insider these new apps were underpricing traditional brokers to gain market share but were generating revenue at a loss.”
Uber Freight HQ will be focused on engineering operations, sales, and account management.
Originally posted on Trucking Info