Uber Ups the Ante on Uber Freight Trucking Division

With the news last week that Uber was abandoning its autonomous commercial vehicle research business (for now, anyway) a logical take-away would be that the San Francisco-based tech company has soured on trucking. In fact, it appears Uber is doubling down on trucking.

According to news reports, Uber Technologies is creating a standalone business out of its long-haul trucking business, Uber Freight, with plans to double its investment in the unit to drive growth ahead of a much-anticipated initial public offering.

A major component of this move is the rehiring of Lior Ron, a co-founder of autonomous truck start-up, Otto, which was acquired by Uber in 2016 in order to jumpstart its own autonomous truck research work. Ron left Uber in March along with other former Otto executives. But a newly negotiated deal on his return to Uber Freight will give that business unit more autonomy to make acquisitions or strategic investments.

According to reports by Reuters, as part of Uber’s reorganization, the co-founders and employees of Otto will receive an equity stake in Uber Freight, although Uber declined to provide details on the value of that equity or the number of employees receiving it.

Anthony Levandowski, who co-founded Otto with Ron and was at the center of Waymo’s trade-secrets theft allegations, also received equity in Freight. But Levandowski, who was fired from Uber last year, is selling his Freight shares to a venture capital firm, Uber said.

Reuters is also reporting that Uber will double its investment over the next year in Freight, essentially a high-tech brokerage service using a driver-friendly app that was set up in May 2017 for truck drivers and fleet managers looking for cargo to haul across the continental United States. It declined to provide a dollar amount, but said Freight’s growth was promising. The business is doubling the number of loads it connects with truckers every quarter, Uber said.

Uber stressed that Freight was a key area of investment leading up to Uber’s initial public offering planned for next year. The U.S. trucking business is a $700 billion industry, but Reuters noted that Uber is competing in a crowded and fragmented market. (See HDT story, "How Disruptive Will Uber Freight be for Trucking?)

Uber has additionally taken pains to distance its Freight division from Otto, saying the two were separate, independent businesses without overlapping products, Reuters said. However, earlier comments from Levandowski set up visions of driverless trucks being dispatched via an Uber-like app.