The Problem with the “Uber for Trucking” Model

May 25, 2017

X for Y. It’s a common format for pitching a startup. Everything is the Uber for this, or the Airbnb for that. You take a well-known, successful business model, and you apply it to the industry that your idea can benefit. Several companies have already pitched the “Uber for Trucking”, in fact, this week Uber itself launched Uber Freight. There’s nothing wrong with pitching an idea using the X for Y format, but it does beg the question, what impact does this have on an industry as large and resistant to change as logistics has been until recently?

The Pitfalls of the “Uber for Trucking” Model

Every technology revolution will have copycats and imposters, and we’re seeing plenty of that in the logistics space. Since project44 was founded, numerous companies claiming to offer similar services have emerged. There are a lot of tech-startups springing up that offer other logistics services as well. The issue is that many of them don’t offer much in the way of tangible solutions—they’re just marketing without much real product development behind it.

The logistics industry is far too massive and involved to truly benefit from the same quick-fix model as booking a hotel or scheduling a ride. project44 President, Tommy Barnes, shared this concern in an article for the Wall Street Journal, “There are a lot of tactical things that accompany shipments. It’s not just as simple as, you pick something up, drop it off, and the driver leaves.” On a surface level, it probably seems convenient to be able to use an app to schedule a quick pick-up and have it sent to a destination, but without the right technology connecting all parties involved, supply chain visibility will almost certainly suffer.

Let’s paint a scenario. A shipper uses the “Uber for trucking” app to schedule a pickup. The carrier comes and picks up the load, but they aren’t connected to the same technology as their destination. If they’re going to a business, there might not be anyone at the dock to receive the delivery. If the destination is a consumer, they’ll have little to no idea when to expect the package, which is a genuine issue for the modern consumer.

The same connection issues can occur with on-demand warehousing apps, and just about any other quick-fix logistics technology. In fact, there are a multitude of issues that can arise with these models, and most of them center around visibility and customer experience.

But that doesn’t mean these are bad ideas by any means. It simply means they require further technology to be truly successful.

Technology Solutions

Full supply chain visibility with on-demand trucking and warehousing solutions is possible so long as they connect to the right technology.

Especially in the early development stages, these apps won’t have the true network connectivity available to provide visibility across the supply chain—unless they connect to an API freight hub like project44. Plugging into a connectivity and middleware-based technology solution layer that already provides visibility solutions across a large capacity provider network will deliver the end-to-end data required for true visibility. APIs are the ultimate piece to the puzzle that will make these X for Y companies viable.

One thing is clear—we’re at the very start of the logistics tech revolution, and APIs are at the heart of positive change. We’ll continue to see new companies making the claim that they’re the X for the logistics industry’s Y, but if they don’t make use of technology like project44, they won’t make it very far.

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