Brokers, Please explain the plummeting rates these days.

I believe l saw Uber Freight doubled their profit last quarter. Must be nice l wonder how!

 

This is a bad example. Uber Freight has always been massively unprofitable, and their recent rise to profitability is primarily driven by the acquisition of Transplace. They are still waaaaaay behind everyone else in the business, they return less than one cent for every dollar they sell.

 

Really? I thought the whole point was they had very low overhead

 

With their "do it all in the app" model and all their call centers moved to cheap labor countries, I'd expect the overhead to be the record small as compared to other players of their size. They don't seem too bad with freight acquisition either. I don't understand why they were making losses for so long.

 

They got the freight by bidding below cost and subsidizing the rate out of their own pocket.

It's the same thing they did with their passenger division. Offer rates far below cost to the passenger and pay the driver out of their own pocket to build a customer and driver base, then slowly start charging the customer more and paying the driver less.

 

Thanks for the info. I thought mabye it was charging shippers $6+ a mile and just paying Carriers even less. The app can be addictive l found. Now you have a whole subset of Carriers that never make one phone call. They just just click and go.

 

Gentleroger nailed it. Rather than developing a strong carrier base and training or hiring a team that understands the industry and how to add value to both shippers and carriers, they just charged stupid low rates (regardless of cost to the truck) and gathered huge market share that way. They've started to make some changes there, but the real reason they are finally making a small return on their massive amount of freight sold is that they acquired transplace which was always pretty profitable.

 

No problem. And long term they've definitely impacted the way freight brokers will work with their carriers. Many large brokers are identifying ways they can provide their carriers with a "book it now" option to book a load.

 

"Why build a business when you can just steal it?" JP Morgan paraphrase.

 

Anyone try Uship and get paid?!