Last week, Uber announced that it was selling a $500 million stake in Uber Freight to Greenbriar Equity Group, a New York-based investment firm. Greenbriar will purchase $500 million of Series A preferred stock. Uber Freight has been valued at $3.3 billion. Uber will retain controlling interest in its logistics division, and it will use the new capital to scale its logistics platform and focus on product innovation. The transaction is expected to occur in October 2020.
Uber Freight’s logistics network
Uber launched its Uber Freight logistics division in 2017, using its digitally-enabled carrier network to facilitate deliveries for thousands of shippers. Focused on driver-first carrier tools, drivers book loads for pick-up similar to how they would book an Uber ride. Using the company’s technology, shippers can plan, budget and track their freight through the delivery process. In the wake of the COVID-19 pandemic, Uber Freight was able to support growing supply and demand needs help with the shipment of essential goods.
Uber Freight now has close to 65,000 carriers in its network, and it works with thousands of shippers, ranging from small businesses to Fortune 500 companies. Its customers include AB Inbev, Nestle, LG, Niagara Bottling, Heinek and Land O’Lakes.
“We are tremendously proud of what we have accomplished in a few short years. We have led the industry with technology, transforming dated and analog processes to ensure that both shippers and carriers are equipped to succeed in a rapidly changing industry,” said Lior Ron, head of Uber Freight, the company’s October 2 announcement.
“We are thrilled to be moving into the next chapter with Greenbriar by our side as a partner with deep expertise and a shared passion for simplifying logistics. We will continue to leverage Uber’s leading marketplace technology, global reach, and cross-platform capabilities to accelerate our growth and continue to lead the industry forward,” added Ron.
Greenbriar managing partners join Uber Freight board
As part of the deal, Michael Weiss and Jill Raker, managing partners of Greenbriar, will join Uber Freight’s board of directors. Weiss and Raker both have a background in investing in logistics.
“We are excited to support Uber Freight in the next stage of its development with both our financial investment and our industry-leading experience in logistics,” said Weiss. “Uber Freight has created an innovative and effective approach to logistics technology that we believe is highly scalable in the coming years. In particular, we believe that carriers and shippers will be increasingly attracted to the convenience and simplicity that Uber Freight offers in a complex marketplace. We are eager to share the extensive knowledge and expertise we have built through our decades-long involvement in the logistics sector.”
Other Uber businesses impacted by COVID-19
This is the latest of Uber’s businesses that have been affected by the pandemic. When states and other municipalities began shelter-at-home orders, Uber ride-shares were not needed because people were staying home, and there were so few places open to go to. Even when the country began reopening, safety was an issue. Drivers had to put safeguards in place, but that didn’t bring back passengers to pre-pandemic levels. In May, Uber sold its micromobility subsidiary Jump to Lime. In July, Uber acquired Postmates for $2.65 billion in an all-stock deal to help grow its Uber Eats food delivery service, which has gained in popularity since the pandemic began. Uber Eats offers a subscription option to help customers save on delivery fees while providing Uber with recurring revenue.
The ride-share and micromobility industries are not immune to the economic impacts of the pandemic. Though not yet profitable according to TechCrunch, Uber Freight seems to be an area where the company can grow and, hopefully, be successful. There is no doubt that shipping options and additional carriers are needed right now to get all kinds of goods from one place to another. It supports the economy, while also giving Uber another opportunity to be profitable.