Uber Freight Aims to Build the World's Most Comprehensive Logistics Network with its $2.25 Billion Acquisition of Transplace

author: Eric Walz   

Ride-hailing giant Uber Technologies Inc is ramping up plans for its Uber Freight division and announced its acquiring logistics and data company Transplace for up to $2.25 billion. The transaction includes up to $750 million in common stock of parent company Uber and the remainder is cash.

Uber Freight will acquire Transplace from Fort Worth, Texas-based private equity firm TPG Capital. Transplace was acquired by TPG Capital in 2017. Uber Freight's acquisition of the company will create one of the leading logistics technology platforms, with one of the largest and most comprehensive managed transportation and logistics networks in the world, according to Uber. 

Transplace's logistics platform powers one of the largest managed transportation and logistics networks in the world with over $11 billion of Freight Under Management (FUM) and 62,000 users. The Texas company has invested heavily in technology to create customizable solutions for managing today's supply chain. 

"The acquisition will combine the world's premier shipper network platform with one of the industry's most innovative supply platforms, to the benefit of all stakeholders," said Frank McGuigan, CEO of Transplace. 

The transaction is subject to regulatory approval and other customary closing conditions.

The acquisition comes as the trucking industry undergoes a transfromation made possible by modern technology, including the development of self-driving long-haul Class-8 trucks from companies such as Aurora, Waymo and TuSimple.

Shippers around the country are beginning to use technology and data insights to reduce costs and find ways to make their fleets more efficient. With Uber's acquisition of Transplace, shippers and carriers will now have access to the ride-hailing company's data science expertise.

Uber has amassed a vast trove of data on how people get around via its core ride-hailing business, including precise traffic data in cities and on highways around the world. 

To manage fleets of trucks, Uber Freight uses the same type of technology that powers Uber's ride-hailing app, but now it will be combined with a robust data and logistics platform developed by Transplace.

"This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem," said Lior Ron, Head of Uber Freight. "This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers' entire supply chains, delivering operational resilience and reducing costs at a time when it matters most."

Uber Freight is creating a logistics platform for both shippers and carriers. The combination of Uber Freight and Transplace will help optimize the movement of freight across and deliver best-in-class services to shippers and carriers.

The technology of both companies will be used to create a fully scaled logistics platform built to meet both shippers and carriers, regardless of the size of the business or location.

Uber Freight operates as a broker, using it's parent company's mapping and routing technology to match shippers with available truck drivers. The division of Uber set out to disrupt the antiquated way brokers and truck drivers traditionally do business. Uber Freight manages payments as well as route scheduling, all powered by Uber's platform.

Uber Freight's brokerage will continue to operate independently from Transplace's managed transportation services to ensure the highest-quality service for shippers.

Uber Freight was formed after Uber acquired self-driving truck startup Otto in 2016. Otto was co-founded by former Google employees Anthony Levandowski, Lior Ron and others. Levandowski was a top engineer for Google's self-driving car project for over a decade before leaving to form Otto.  

At the time, Uber was aiming to add driverless trucks to Uber Freight in the future as part of an autonomous logistics service.

Uber purchased Otto for around $680 million in 2017 in order to jumpstart its own autonomous driving development. Levandowski was eventually put in charge of Uber's Advanced Technologies Group (Uber ATG), the division of Uber working exclusively on autonomous driving technology. Otto was eventually absorbed into the Uber Freight.

Uber Freight now has 70,000 carriers in its network and thousands of shippers as customers. It's continually expanding its operations.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.