Daily Management Review

Uber To Launch Freight Platform In Germany


United States based ride hailing company Uber intends to rival local German technology startups in its overall plan of taking a share of the $500 billion trucking market of Europe and will be launching a freight platform in the largest economy of the European Union, according to report.
The company had earlier launched a similar trucking platform which makes Germany the second market for this US firm to open such operations in Europe. Reports also suggested following the smooth running of the German operations, Uber would also look at expanding into other markets in Europe.
The Uber Freight of the company in the United States is large connecting 48 different states and generates an average of $125 million revenues quarterly. The earlier attempt by Uber to set up its ride hailing operations in Germany under its former head and founder Travis Kalanick was rattled and by prolonged opposition by taxi firms  politicians and the courts.
Daniel Buczkowski, Uber Freight's head of European expansion, said that this time however, German officials and industry have been consulted by the current CEO of the company Dara Khosrowshawi so that there is no repeat of its last experience in the market and to find supporters for its freight business, said Daniel Buczkowski, Uber Freight's head of European expansion.
"After the change in leadership, we really engaged in doing the right thing," Buczkowski, who is German, told the media.
One of the major competitors for Uber in this segment would be sennder –a startup based in Berlin which already is operational in a number of European markets and had recently raised about $70 million in investments from private equity house Lakestar and other investors.
The trucking industry is very fragmented and unorganized and typically comprises of companies that have 10 or fewer trucks and the efforts of companies like Uber and sennder is to accumulate the industry through digitization to increase efficiency. Currently, according to data, about 21 per cent of the total distance that trucks travel remains without any freight which mean that there is no revenues for the distance but incur fuel, costs. On the other hand, digitization would also help shippers and hauliers as they would be able to track their cargo much easier because of real-time tracking of consignments. Payment automation will also help them immensely, say the digital trucking platforms.
"The key to getting a lot of value out of this industry is understanding how to use those empty kilometers," said Nicolaus Schefenacker, a co-founder of sennder, which was set up in 2016. He has said that modeling and forecasting of traffic flow becomes easier with the expansion of the network which in turn helps to ensure that packages are loaded on to the right truck at the right price.
The role of Uber Freight would be that of a middleman in a market that already has an established pricing structure which is unlike the business operations of Uber's ride-hailing app or its food-delivery service.