Uber is getting in the long-haul delivery business, launching a new unit called Uber Freight.
According to a report, the new unit is being based off of Otto, a self-driving trucking firm Uber paid $65 million for this past summer. The idea behind the new unit is to create an Uber trucking marketplace.
“Even if you look pre-acquisition, Otto was always about reinventing transportation,” Eric Berdinis, product lead on Uber Freight, told Business Insider. “Even though we started with the announcement of the self-driving trucks, we were always intending to build a marketplace that would allow self-driving trucks to flourish.”
Uber Freight’s first offering will be a marketplace to hook up shippers with a truck, similar to how the Uber app hooks drivers up with riders. With Uber Freight, there will no longer be a middleman. It will also offer shippers pricing in real time in terms of what it will cost to transport their goods based on supply and demand. At times when there is an increase in demand for trucks, it could mean higher prices and vice versa.
“You’re going to save money by having real-time pricing,” said Berdinis in the report. “Having a middleman who is essentially making phone calls all day long at its very core is not efficient.”
While Uber is going to face competition in the trucking marketplace, Berdinis thinks its intellectual property and operations around the world will make Uber Freight the winner. “We’re talking about shipping hundreds of thousands of dollars. You need a company that has scale to be able to handle this,” Berdinis said, pointing out that Uber already has offices around the globe.