Uber has mastered the art of delivering both people and their meals from place to place. When it comes to hauling shipments and freight, however, the company is still an amateur. But that’s about to change.
Uber made its bones on efficiency-boosting tech — replacing curbside cab-hailing with a few simple taps — and the firm renewed that ethos Thursday with the acquisition of tech-focused logistics provider Transplace in a $2.25 billion deal.
The Road To A Five-Star Shipping Service?
With bars, restaurants, and other events shut down over the past year, demand for Uber’s core business understandably plummeted, and the company has since sought to diversify its palate of offerings. Enter Uber Freight, a shipping unit that matches truckers with shippers who need to transport cargo.
Freight currently represents a minuscule slice of the overall Uber pie, with profits elusive for the new unit as it gains a foothold in the sector:
- Of the company’s $19.5 billion in gross bookings in Q1 2021, Freight accounted for just $302 million of those revenues.
- Last October, a cash-poor Uber sold off a portion of its Freight unit for $500 million in a Series A funding round that valued the shipping business at $3.3 billion. And just before that, in September, Uber sold the entire European arm of Freight.
Still, Freight touts some high-profile names on its client list, from Anheuser-Busch to Nestle, and is about to receive a fresh import of logistics know-how via Transplace.
The Transplace Effect: Uber’s new acquisition Transplace specializes in digital bookings for domestic shippers and already sees about $11 billion of freight under its management. Some analysts project the acquisition will make Uber the eighth-largest third-party logistics company in the U.S.