Author Topic: Uber Technologies, in its ongoing quest to move beyond its unprofitable busines  (Read 45 times)

YELLO

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Page 1 of 2 2018 Dow Jones
The Wall Street Journal Online
WSJO
English
Copyright 2018 Dow Jones & Company, Inc. All Rights Reserved.
Uber Technologies Inc., in its ongoing quest to move beyond its unprofitable business of connecting drivers with
passengers, is adding a new tractor-trailer rental business to help big-rig truckers haul freight around the country.
The San Francisco company is set to announce a new division called Powerloop that will connect small- and
medium-sized carriers with fully filled trailers from businesses such as brewer Anheuser-Busch InBev SA. Uber
has leased hundreds of trailers from an undisclosed company and is renting them to carriers for $25 a day,
planning to profit from the difference.
It may sound like a departure from Uber's business of connecting urbanites with rides around town, but Uber says
the technology behind its core app translates well to the shipping industry. Its related Freight division, which alerts
truckers with their own empty trailers to waiting cargo loads through smartphones, has been growing, expanding
from Texas last year to nationwide.
For Uber, the success of Powerloop and Freight is important to demonstrating the company is more than a
one-trick product, particularly as it eyes an IPO that banks are proposing could value the company at as much as
$120 billion next year, The Wall Street Journal reported Tuesday.
Uber has found some success with prepared food delivery unit UberEats, which is expected to be profitable
before the core ride-hailing business and potentially underwrite losses, according to people familiar with the
company's finances.
The Freight business is unprofitable, according to people familiar with the matter. Chief Executive Dara
Khosrowshahi has said as recently as August it is on a pace to achieve $500 million in revenue within the next
year.
Regarded by the tech industry as cumbersome and labor-intensive, the trucking business has attracted a number
of startups aiming to shake up the industry.
Venture capital and other investors have, according to market research firm Armstrong & Associates, bet $662
million since 2011 on digital-friendly, load-matching startups such as Cargomatic Inc., Flexport Inc. and Jeff
Bezos-backed Convoy, which last month gained a $1 billion valuation in a round led by Alphabet Inc.
Uber may be seizing on an opportunity as trucking capacity has been strained amid a fast-growing U.S. economy.
Rates for last-minute truck transportation were up nearly one-third over the summer from a year earlier, during
what is typically a slow time of year.
Uber said its matchmaking system will spare carriers from waiting around as trailers get loaded with goods and
allow shippers to load them at their convenience, rather than waiting for trailers to arrive. For now, Uber will be
testing Powerloop in Texas, though the company expects to expand it to other U.S. regions.
Among Uber's first customers is Anheuser-Busch, the brewer behind Budweiser and Bud Light. On-demand
rentable trailers could cut the time carriers spend at a shipping site by 25%, said Ties Soeters, Anheuser-Busch's
vice president of logistics procurement in North America. The brewer has already arranged for about 250 trailers
of beverages to be hauled off using Powerloop as part of a trial, he said. About 30% of Anheuser-Busch's U.S.
volume is live-loaded, or done while a big rig truck is waiting, said Mr. Soeters.
« Last Edit: October 17, 2018, 02:23:47 PM by YELLO »