Uber Freight May Revolutionize Trucking

October 1, 2020 Truck Accident Blog

How Uber Freight Could Change the Trucking Industry and the Work of a Truck Accident Attorney

Uber launched Uber Freight in May 2017, seeking to change trucking the same way that it revolutionized personal transportation. The company still has some way to go to penetrate the market, but the service offers some features that could make trucking much more efficient and automated. This will likely have a major impact on the roughly $800 billion trucking industry in North America and other motorists who share the road. A truck accident attorney can talk about liability in this new venture.

What Is Uber Freight?

Think of how Uber works for passenger cars, and then apply the model to the trucking industry. Uber Freight connects independent truck drivers with those who are looking to have their goods transported around the country. However, there are some important differences from the ride-sharing app.

Customers begin the process by posting details about their loads on the Uber system. Truck drivers can see the details and then choose whether to negotiate with the customers. The two parties will interact as they settle on the terms of the trucking engagement. Uber acts as a middleman between the truckers and the customers and gets paid a cut of the proceeds of the transaction. There is no physical broker that acts as the middleman. Instead, everything goes through the platform, which acts as a broker would. Uber vets the individual truck drivers and verifies their safety and inspections records before they can participate.

Uber is investing large amounts of money to gain a toehold in the trucking industry. In September 2019, the company announced that it would be spending $200 million to expand its trucking venture. While Uber Freight is still in its early stages, the company promises to be a disrupter in the cargo industry. If what Uber did to the taxi industry is any indication, trucking as we know it is about to change.

Is Uber Freight a Game Changer in Trucking?

For now, Uber Freight will not necessarily change the future of the trucking industry. Trucking is often about the market and pricing power of the drivers. Right now, truck drivers have as much power as they had in years. There are simply not enough truck drivers to go around in the economy.

As a result, truckers have more of an ability to set the terms of their transactions. Especially in the COVID-19 economy, producers need someone to haul their goods quickly to keep inventories stocked. Truckers do not need to share their labor rates with Uber because finding clients is really not a problem for them right now. This is a banner economy for truckers, and they have more pricing power.

However, even in a banner market for truckers, some drivers may still see the need to use brokers. Where Uber Freight can benefit is that this brokerage process can be completely automated. There is no need to sit around waiting by the phone for a call. There is even no need to talk to a human being. Everything that a broker can do is possible to do on Uber Freight in less time. Where Uber Freight can make a difference is if it can cut the brokerage commission that must be paid to find truck drivers. Nonetheless, many drivers may not yet need the services that Uber Freight offers.

However, this may change in the very near future. When labor rates for independent truckers go up, it encourages more people to get into the business. Especially as other workers get laid off from their jobs, they may choose to redirect into an industry where there is growth potential.

Uber Freight Is Still a Small Player

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To be a game-changer, Uber Freight will need to make inroads in the driving community. Some drivers who do not need this service will need to be persuaded that Uber Freight is a viable option for them. Moreover, other drivers who use human brokers must be sold on changing the way that they do business. In response, Uber Freight is doing several things to lure drivers to its platform.

Uber is offering discounts to drivers on things that they must pay for such as tires and gas. They are spending heavily to lure truck drivers, investing hundreds of millions of dollars into subsidizing the business. It is not yet clear whether these efforts will be successful in getting truckers to use the site. Uber Freight can only revolutionize trucking if it attracts truckers.

Uber Freight’s Data Can Change Trucking and the Work of a Truck Accident Attorney

One way that Uber Freight’s impact is already being felt is in the data that its system can harness and provide. Uber Freight can provide truck drivers with a point of reference as they plot their future business. The app incorporates many of the same feedback features as the ridesharing app. The important thing is that truckers can rate the customers. Other truckers can learn important facts on the pickup and delivery facilities. There are already hundreds of thousands of ratings available on the platform. Drivers do not need to learn the hard way that they will be dealing with a difficult customer. Instead, they can know ahead of time before they accept the engagement.

The same feedback mechanism also can help facilities improve their experience for drivers. If facilities struggle to get drivers because they provided a bad experience, they can now improve.

Where Uber Freight can change trucking is in making operations more efficient. Drivers will have fewer instances of wasted miles. At the same time, shippers will not pay as much for loads that are less full. They will pay for the exact amount of their shipping because the full size of the load will be known to drivers before they price it. If Uber Freight does take off, it will reduce some inefficiencies in the business.

The other benefit of the experience for shippers is that the app can tell them where the drivers are on a real-time basis. It is an easy way for small shippers to gain more data about delivery times without having to invest in technology themselves. They do not need to call the driver and distract them when they are trying to drive safely.

There Is Still Much Room for Uber Freight to Grow

Right now, there is still much room for Uber Freight to grow. The total freight brokerage market in the U.S. is $72 billion. Right now, the company has less than 0.5% of the total market share. However, shippers and truckers are beginning to sign up for the platform in larger numbers.

How Will Liability Issues and the Need for a Truck Accident Attorney Be Affected by Uber Freight?

As far as trucking safety is concerned, the basics of the trucking industry will remain the same. Truck drivers will still need to comply with industry safety rules. Automation and streamlining of the industry will do nothing to alter the basic obligation of truckers to exercise due care behind the wheel. If they fail to uphold their duty of care, a trucking accident attorney would advise you on what you could recover for your injuries in a truck accident lawsuit. To the extent that Uber Freight improves overall safety, motorists on the road will benefit. However, many motorists have long viewed Uber and other ridesharing apps with suspicion when it comes to choosing drivers and enforcing maintenance protocols. It remains to be seen how Uber Freight will fight to shake this image.

If you have been injured in an accident, contact a New Brunswick, NJ trucking accident attorney at Rebenack Aronow & Mascolo. Call (732) 394-1549 to set up your free initial consultation.

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