Uber Technologies Inc (NYES:UBER) has announced that its truck hauling business is establishing headquarters in Chicago. This is part of a wider plan to invest over $200 million annually to bolster the venture.
The company has indicated that in the next three years it will hire 2,000 employees dedicated to the Uber Freight venture.
Expanding Uber freight business
Launched in May 2017, Uber Freight has expanded from a limited regional venture to the rest of the US and Europe. The service helps in connecting truck drivers with shipping companies just like the ride-sharing app. The business is vital to the company’s overall business strategy. It aims at generating revenue from all forms of transport. The company is has ventured into food delivery through Uber Eats.
This is a great move to expand the freight business even as the company’s overall business continues to lose money each quarter. The company reported an uninspiring quarter which saw it report a loss of around $5.3 billion. Much of the loss is attributable to one-time expenses such as stock-based compensation. Revenue growth has slowed, and it seems like the company will not be profitable any time soon.
Uber optimistic about freight business despite softening of the market
The focus in the freight business should not be a place for the company to bank on so much. In the past few years, there has been a shortage of truck drivers and experts indicate that there are not enough drivers to meet demand. as a result the market has softened leading to an overall decline in prices.
Nonetheless, Uber’s management indicates that the freight segment is full of promise. Uber CEO, Dara Khosrowshahi stated that despite softening market conditions, the company’s freight business continued to so incredible growth and significant progress in the second quarter.
Head of Uber Freight, Lior Ron indicated that the soft market conditions experienced were just a result of the cyclical nature of the freight industry. He added that each time the economy picks up the trucking industry would also receive a significant amount of assets. Ron said that truck orders are currently at historic highs.