Exclusive: Uber to move freight, target trucking for the long haul

Wed Sep 28, 2016 1:04am EDT
 
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By Julia Love and Heather Somerville

SAN FRANCISCO (Reuters) - With its recent acquisition of self-driving truck startup Otto, Uber Technologies Inc.[UBER.UL]is plotting its entry into the long-haul trucking business, aiming to establish itself as a freight hauler and a technology partner for the industry.

Otto plans to expand its fleet of trucks from six to about 15 and is forging partnerships with independent truckers, Otto co-founder Lior Ron told Reuters in an interview. Starting next year, Otto-branded trucks and others equipped with Otto technology will begin hauling freight bound for warehouses and stores, he said.

Uber has already started pitching services to shippers, truck fleets and independent drivers, and the services go well beyond Otto's initially stated goal of outfitting trucks with self-driving technology. It also plans to compete with the brokers who connect truck fleets and shippers.

Fully autonomous trucks remain years away - some trucking industry experts estimate two decades - and the Otto vehicles are currently manned by a driver and an engineer. But the Uber-Otto efforts include a host of other technologies involving navigation, mapping and tracking, which can be deployed even as work continues on self-driving systems.

An executive at one company told Reuters he had already been approached by Uber about hauling his goods, noting that Uber touted recent hires and advances in trucking technology.

Uber aims to ultimately transform the competitive and fragmented $700 billion-a-year trucking industry, which is notorious for low margins. The company is challenging a host of established players, ranging from publicly traded companies, such as third-party logistics firms C.H. Robinson and XPO Logistics, to countless mom-and-pop trucking businesses.

Otto has had motor carrier permits with the U.S. Department of Transportation and California Department of Motor Vehicles to move cargo since earlier this year. Eleven days after the close of the Uber acquisition last month, Otto filed for a new permit to haul freight, noting it would expand its fleet to 15 trucks.

Ron told Reuters that Otto also aims to partner with the industry, and that "thousands" of owner-operator truck drivers have reached out to the company.   Continued...

 
FILE PHOTO --  An Autonomous trucking start-up Otto vehicle is shown during an announcing event in Concord, California, U.S. August 4, 2016.   REUTERS/Alexandria Sage/File Photo