Uber Technologies Inc. is expanding its freight division into Canada to snag a piece of the country’s US$74-billion trucking market.
The San Francisco-based company has been gradually expanding its services beyond ride hailing in recent years with ventures including food delivery, e-bikes and e-scooters. Uber announced last month that it would invest US$200-million into its freight division.
Similar to the ride-hailing app, it connects firms that need to ship goods with truck drivers to bridge supply and demand in long-haul delivery. Trucking companies with fleets of any size can use the dedicated freight app and website to find goods to pick up when they need to, reducing the need to travel with empty trucks.
The launch in Canada will include both domestic and cross-border shipping to and from the United States, the company said. Ontario and Quebec will be its first Canadian markets, with other provinces to follow. Uber Freight launched in the United States, then expanded to Germany and the Netherlands. Its clients include AB Inbev and Colgate Palmolive. Among its first shipping partners in Canada is Martin-Brower Co., which delivers for McDonald’s Corp. and other restaurant brands.
Uber hopes to work with partners with all sizes of fleets, from large logistics firms such as Martin-Brower to owner-operator drivers. In an interview, Uber Freight’s head of operations, Bill Driegert, said larger fleets can expand their network for finding goods, while more cash-constrained individual drivers can reduce the risk of cancelled clients or empty return trips. “For an individual carrier, the best way to have a successful, sustainable business is to keep [the] truck moving,” Mr. Driegert said.
The Canadian Trucking Alliance projected in 2018 that the country would face a shortage of as many as 34,000 drivers by 2024, with older drivers retiring and fewer younger drivers entering or sticking in the industry. Mr. Driegert said Uber hopes to lure more drivers into the industry by improving revenue opportunities with increased loads. In doing so, it also hopes to get a piece of a market that logistics research firm Armstrong & Associates says was worth US$74-billion in 2018.
A growing number of software providers have been beefing up their supply-chain services to manage trucking fleets and delivery logistics. That includes major U.S. software-as-a-service providers such as California’s Oracle Corp. and Descartes Systems Group Inc. in Waterloo, Ont. Mr. Driegert said Uber doesn’t consider itself a competitor to such services. Instead, it hopes to augment them; as an example, the company recently announced an integration with the German company SAP SE’s logistics service.
Traditional freight brokers such as C. H. Robinson Worldwide Inc., meanwhile, have had to invest in technology to avoid being disrupted by Uber, as other digital “freight-matching” services such as Convoy Inc. join the ranks of disruptors.
Uber announced a new Chicago office in September, where it hopes to hire as many as 2,000 new employees, many of whom will be dedicated to the freight division.
The company did not reveal any targets for Canadian usage, but said that it would hire an unspecified number of local staff dedicated to the division.
The company has struggled since listing on the New York Stock Exchange in May, as its proposed valuation of US$80-million or higher collapsed when trading began. Its market capitalization now sits at about US$56-billion. Reports emerged this month that the company had laid off as many as 350 across divisions including food delivery and its Advanced Technologies Group, which runs its self-driving-vehicle research.
That group is headquartered in Pittsburgh but has a large presence in Toronto. Uber confirmed that its Canadian operations were affected but did not provide specifics. Last year, Uber said it planned to invest as much as $200-million in Toronto engineering talent in the coming years to focus on the technology. Last December, its self-driving cars returned to Toronto streets – with drivers in control – after they were pulled off the road after one killed a pedestrian in Arizona in March, 2018.