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Uber’s ‘Other Bets’ category, which includes Uber Freight, t…

(Uber Photo)

Uber’s stock had a rough day in after-hours trading Thursday after the company revealed a $5.2 billion quarterly loss and slowing revenue growth.

One bright spot in its earnings report was the “Other Bets” category, which is primarily made up of Uber Freight, its on-demand trucking marketplace that launched in May 2017.

Revenue from that category, which also includes Uber’s mobility services such as bike-sharing, reached $340 million through the first half of 2019, triple from the year-ago period. It’s the company’s fastest-growing segment — Uber Eats revenue was up 80 percent, while ride-sharing revenue was up 6 percent during the first six months of this year.

While revenue is growing, so are losses. The “Other Bets” category posted a loss of $193 million through the first two quarters of 2019, up from $48 million in the year-ago period.

“Uber Freight added new shipping customers across the enterprise, middle market, and small- and medium-sized business segments,” Uber said in a press release. “Our platform for shippers targets the underserved long tail of small shippers with an automated self-serve tool that helped drive 10X year-over-year revenue on the platform. ”

Uber Freight helps match carriers with shipper’s loads, using new technology to expedite and automate a traditionally manual process that involves email and phone calls.

In the past two years, Uber has contracted with more than 36,000 carriers and served more than 1,000 shippers, including corporations such as Anheuser-Busch InBev, Niagara, Land O’Lakes, and Colgate-Palmolive. In March it expanded to Europe and is already growing to various countries.

Convoy co-founder Grant Goodale accepts the award for Next Tech Titan at the 2018 GeekWire Awards. (GeekWire Photo / Kevin Lisota)

Uber Freight competes directly with Seattle-based Convoy; it listed the company in its IPO prospectus earlier this year.

Convoy launched in 2015 and has raised $265 million, including a giant $185 million round this past September led by Google’s VC arm that turned the startup into one of the Seattle region’s only unicorns.

Much like Uber Freight, Convoy also builds technology to facilitate transactions between trucking companies and shippers, providing an alternative to brokers.

Convoy’s investors include Jeff Bezos, Bill Gates, Expedia Chairman Barry Diller, Salesforce CEO Marc Benioff, founders Hadi and Ali Partovi, LinkedIn co-founder Reid Hoffman, and former Starbucks president Howard Behar.

The company does not disclose revenue but says it has “tens of thousands of carriers and a fast‑growing, nationwide roster of shippers comprised of Fortune
500 companies and other organizations.”

Convoy last week put out research about empty miles in trucking, noting the longstanding issue of truckers driving without goods and the associated costs involved. It estimates that 33 percent of trucks drive empty in the U.S.

“New advances in data and technology mean it is now more realistic to make progress toward reducing this industry-critical metric — so it likely that the next two decades won’t look like the last two,” wrote Convoy’s Aaron Terrazas.

Companies such as Convoy and Uber aim to help close that gap — and build their own business in the process.

This past April, Convoy launched a new marketplace to help small trucking businesses compete with large carriers.

Other competitors to Uber Freight and Convoy include traditional brokers such as publicly-traded giant C.H. Robinson, while freight operators themselves are also investing heavily in technology to keep up with demand. There are also newer direct competitors including Transfix; Trucker Path; DAT; and others.

The U.S. trucking industry is estimated to be $800 billion.

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