No longer content with disrupting the traditional business models of taxi, parcel delivery and food-delivery services, US-based Uber Technologies is now setting itself up to take on the traditional heavy transport market with the advent of freight.uber.com.
It is very early days for the venture, with Uber Technologies seeking expressions of interest from freight owners and transport operators on its new website, but chief executive officer Travis Kalanick told Business Insider the company is definitely getting into the heavy transport business.
“It is a challenging, interesting, nuanced business, and it is going to be intense getting into it, but that’s exciting to me,” Kalanick told Business Insider.
Road Transport Forum chief executive Ken Shirley says e-commerce platforms such as Uber are challenging the traditionally direct and personal relationships between the transport operator and the customer, where often the freight was carried on an understanding and a handshake.
“You could argue that this is a natural progression to the brokering of freight, it’s one of the many changes of globalisation where people are looking to drive out costs from their business and gain greater efficiencies,” Shirley says. “People are using e-commerce platforms to get the most competitive rate, look at how it’s driven down the cost of taxis in New Zealand.”
“We’ve seen this change the courier industry, where the freight is brokered, you don’t know who is carrying your goods and you hope they turn up undamaged,” he says.
“While e-commerce won’t apply to all aspects of the transport industry, we already see it in various forms, such as the Kotahi supply chain collaboration and the Coda logistics collaboration resulting in greater freight consolidation and better efficiencies for their customers,” Shirley says.
Carr and Haslam managing director Chris Carr is of the opinion that autonomous truck technologies would have a greater impact on the future of the New Zealand heavy transport industry than would Uber setting up here as a freight broker.
“That type of brokerage framework already exists, and I do get continually bombarded with calls with people asking if I’m interested in this and that,” Carr says.
“I don’t know how Uber Freight would work in such as market as New Zealand, because everyone works hard to control the freight here, but the United States is a different market with different dynamics and different freight volumes,” he says.
“I guess Uber is looking to be a freight broker, but I don’t think it would work here in New Zealand, as there isn’t enough surplus freight floating around to launch such a service on to the market.”
He adds: “Unlike the US market we haven’t got a surplus of trucks, and we do have a driver shortage, not to say that this situation won’t change. I can see the advent of autonomous trucks having an impact on the industry in the next 10 to 15 years, and I can imagine that being more disruptive to the industry than Uber.”
Carr says, “The Uber style of business certainly won’t appeal to transport operators with low margins.”
Autonomous Trucks
As part of its strategy to create a marketplace to put freight customers and transport operators together, in the same way that Uber puts riders and car owners together, it also acquired another technology start-up called OttoMotto LLC (Otto) in July 2016.
According to techtimes.com, Otto was founded earlier in 2016 by former Google engineer Anthony Levandowski, who worked on the self-driving car project for his previous employer. Levandowski was joined in the Otto enterprise by co-founder Lior Ron, a former Alphabet employee who led Google maps, and also worked on the Moto-X smartphone.
Otto is developing self-driving hardware for heavy-duty trucks, enabling them to run without a driver at the wheel. It currently has three Class-8 Volvo semi-trucks on test in the USA, one of which only recently delivered a full cargo of Budweiser.
A blog post from Otto says that in partnership with brewery company Anheuser-Busch, and with the full support of the State of Colorado, it freighted 51,744 cans of Budweiser from Fort Collins, through downtown Denver, to Colorado Springs.
The Otto blog post reported that by using cameras, radar, and lidar sensors mounted on the truck to ‘see’ the road, its system controlled the acceleration, braking, and steering of the Volvo semi to carry the cartons of canned beer from highway exit-to-exit without any human intervention.
“In fact, our professional driver was out of the driver’s seat for the entire 120-mile journey down I-25, monitoring the self-driving system from the sleeper berth in the back,” says the Otto blog post.
The Otto system is focussed on highway driving because this accounts for the majority of the truck’s driving time. It says that drivers will still be needed for piloting the vehicle through urban areas, as well as loading, unloading and other associated transportation tasks.
On its blog Otto says together with Uber, it will create the future of commercial transportation with self-driving trucks that provide drivers with unprecedented levels of safety, and a platform that matches truck drivers with the right load wherever they are located.
In an interview with Reuters, Otto co-founder Ron made the comment that with Uber, people press a button and a vehicle shows up after three minutes, but in the US freight industry the golden standard is that is takes a freight broker up to five hours of phone calls to find a truck.
“That’s how efficient the industry is today,” Ron told Reuters.
Otto is not alone in developing such autonomous systems for heavy transport operations, Daimler Trucks through its Mercedes-Benz and Freightliner brands is also creating autonomous systems for on-highway applications, and so too is Volvo Trucks.
In October 2015, Daimler Trucks conducted the first automated drive of a production series Mercedes-Benz Actros truck fitted with the highway pilot system on the German Autobahn between Denkendorf and Stuttgart Airport.
Daimler board member Dr. Wolfgang Bernhard drove the highway pilot system–equipped truck on its maiden journey, accompanied by Baden-Württemberg’s prime minister Winfried Kretschmann.
In September 2016 Volvo Trucks conducted its first test of a self-driving heavy-duty Volvo FMX dumper along a 7km route 1300 metres underground in the Kristineberg Mine, which is located 100km from Arvidsjaur in Northern Sweden.
Using various sensors, the FMX continuously monitored its surroundings, and avoided both fixed and moving obstacles during the test run. At the same time, an on-board transport system gathered data to optimise and coordinate the route and fuel consumption, says Volvo Trucks.
But Otto co-founder Levandowski is not concerned about the OEMS developing such technology, telling techtime.com that he believes the truck manufacturers are doing a great job, and would eventually solve the problem.
“A company that is used to building trucks is not well structured to solve a technology problem,” Levandowski told techtime.com.
He says, “I’m not trying to dismiss them in any way, I think it’s fantastic what they’re doing. But I think it’s a different timeframe and objectives as to what we’re trying to solve, and what they’re trying to solve.”
