SAN FRANCISCO--Uber Technologies Inc's drive to become a major player in the trucking business is off to a bumpy start, with analysts and industry executives questioning what exactly the company can bring to the sprawling $700-billion industry.
The San Francisco ride-services giant had planned to disrupt freight hauling by offering a complete package of trucking technology including self-driving trucks and smartphone-based logistics services.
But what has emerged so far, industry watchers say, is a modest effort to build a brokerage service connecting truckers looking for loads to shippers with cargo to haul. Uber's self-driving truck effort is weighed down by a high-stakes lawsuit over allegedly stolen trade secrets linked to its $680-million purchase of self-driving trucking startup OttoMotto last year. Testing of the autonomous technology has slowed and several Otto engineers have been redeployed to Uber's cargo business, according to state transportation agencies and Uber officials.
Meanwhile, that unit, dubbed Uber Freight and launched publicly in May, looks a lot like the firms it is trying to displace. Rival startups and old-line transport firms alike have come out with apps to match truckers to cargo. Uber Freight also uses a conventional call center and online "load boards" where truckers have found work since the dot-com era began.
"The world doesn't need another broker," said Eric Gilmore, chief executive of Turvo, a Sunnyvale, California logistics startup that's trying to wring paperwork out of the shipping process.
Turmoil among Uber's top ranks could also prove damaging as the company grapples with a series of scandals related to its hard-charging culture and business practices. Just this week, Uber Chief Executive Travis Kalanick announced he is taking a leave of absence; his second-in-command Emil Michael left the company; and board member David Bonderman resigned.
Uber executives say the company's push into trucking is moving forward at full throttle. Bill Driegert, director of operations at Uber Freight, said the business is shipping "large brand names" and has "a solid core of drivers who have signed up and are using it regularly."
"We are all in on this," Driegert said. "We are in it for the long-term and we think we can make a difference."
Still, he acknowledged that Uber's self-driving truck initiative and its freight business are on separate tracks, with no plans to collaborate on a full complement of services anytime soon. Otto doesn't yet have a commercial product for customers to buy.
That's a different message from last fall. In a September interview, just a month after Uber acquired Otto, the startup's co-founder Lior Ron told Reuters he expected truckers would be using the firm's driverless technology to haul freight by 2017 as part of a suite of trucking services offered under the Uber banner.
In April, Uber retired the "Otto" name without explanation and now lumps the business into its Advanced Technologies Group, a unit that works on a variety of self-driving technologies and mapping. Detours and course-corrections are typical with any startup. Uber's challenge is to make inroads in a fragmented, low-margin industry where many shippers and brokers have ties going back decades.
