Roadblock ahead… Uber is reportedly considering spinning off its freight division as the trucking industry hits some bumps. The ride-hailing leader launched Uber Freight in 2017, connecting semitruck drivers with companies that make high-volume deliveries (think: a truck full of Pepsi). Last quarter, Freight’s sales grew 43% to $1.5B, and made up nearly a fifth of Uber’s total revenue. But in January Uber Freight said it would cut 3% of its workforce as trucking cools.
Slowing the (freight) train… During the pandemic, trucking was essential in delivering tons of backlogged goods across the nation. But as supply chains start to balance out, so has demand. Last quarter truckload freight deliveries fell 7%, the biggest drop since 2020. Now analysts say shippers will have to charge even less to stay competitive, which could eat into profits.
Sometimes you can do more with less… Ditching Freight could help Uber focus on its core ride-hail and food-delivery businesses, both of which saw record growth last quarter. While offering different services can be helpful, Uber may’ve realized it was diversified enough when its food-delivery biz helped offset a major ride-hail downturn during lockdowns.