| SAN FRANCISCO
SAN FRANCISCO May 11 Uber Technologies Inc
hired the team behind a Chicago transportation
brokerage last fall as part of an effort to break into the
long-haul trucking industry.
All five employees from 4Front Logistics joined Uber in
November, said an Uber spokeswoman, who added that Uber did not
pay anything for the company. Brokerages such as 4Front
Logistics connect manufacturers and retailers that are shipping
goods with truck owners and fleets.
The deal comes as Uber is vying to apply the logistics
expertise it has gained ferrying passengers in countries around
the world to the trucking industry. That strategy puts it in the
middle of a large, highly fragmented industry of freight brokers
who match cargo with truck operators.
Uber Chief Executive Travis Kalanick posted a photo on
Twitter on Sunday of a large white truck emblazoned with the
words “Uber Freight.”
In one of Uber's first public displays of its interest in
trucking, Uber last August acquired self-driving truck startup
Otto for $680 million, a deal that is now at the center of a
legal battle with Alphabet’s Waymo.
Since launching its push into trucking about a year ago,
Uber has been steadily gaining traction, said transportation
analyst Jack Atkins of investment bank Stephens Inc.
“They are being very active building up their scale in the
brokerage market, both in terms of going after customers but
also making sure they have the capacity to fulfill that,” he
Uber, along with Otto, has over the past several months
acquired a fleet of its own trucks to test its technology,
pitched its services to independent truck owners and trucking
associations, and built out a host of other technologies
involving mapping and tracking, which are part of the logistics
package for trucking.
As Silicon Valley aims to ease logistics in entrenched
industries, a host of startups have rushed into trucking, a $700
billion-a-year industry that is notorious for low margins.
Despite its small size, 4Front will help Uber build
capacity, said Ivan Tsybaev, chief executive of Trucker Path, a
startup that has built a popular navigation app for truckers.
“It’s really hard to scale fast, even with Uber’s
resources,” he said.
4Front Logistics was granted a broker license for moving
freight across state lines in March 2016 by the U.S. Department
of Transportation, according to the DOT database. That license
was revoked last month. The reason is unclear, but a DOT
spokesman said most often revocation is the result of companies
not providing proof of insurance.
Uber was granted a DOT broker license for its Uber Freight
business at the end of September.
Otto has been registered with the DOT and with the
California Department of Motor Vehicles to haul freight as a
carrier – not a broker - since last year.
(Reporting by Julia Love and Heather Somerville in San
Francisco Editing by Jonathan Weber and Bill Trott)