Uber has changed the way many people get to and from work, events, and weekend parties. Its innovative business model has changed the way the public thinks about personal transportation. Would a similar concept work in the trucking industry? Amazon wants to find out: The online giant is developing an app that will connect drivers with shippers. Here is what we know so far.
The Uber of Trucking
The app, which may be released as early as the summer of 2017, will work in much the same way as Uber does. Truckers will be able to quickly see what work is available and sign on to pick up and deliver loads.
To make the process as smooth as possible, the app will include such things as driving directions and real-time pricing information. It may even have features that are personalized for drivers, including truck-stop recommendations along the route. However, it is too early to say anything for sure about what the app will and will not do.
Ultimately, the goal of Amazon's new initiative is to cut costs and incorporate complete logistics services into its company.
Services already exist that connect drivers with shippers, but many of these brokers charge a hefty commission — up to 15 percent. That, combined with the already high price tag of getting goods where they need to go, means that both Amazon and its drivers are struggling under the weight of ballooning shipping costs.
Amazon hasn't made any attempt to keep its trucking ambitions a secret; in recent months, it has purchased a large number of tractors. Its new app will expand the company's presence in a trucking industry that is estimated to be worth $800 billion.
Uber of Trucking Isn't a New Idea
Amazon isn't the first company to conceive the idea of an Uber for trucking — actually, Uber itself is already developing a similar concept. Uber Freight was soft-launched in 2016 and is continuing to grow. That initiative began after Uber purchased the self-driving truck company Otto. Although Otto's claim to fame was its self-driving trucks, the company was already hoping to develop an Uber-like trucking marketplace. Indeed, Uber Freight's product lead Eric Berdinis said, "Even though we started with the announcement of the self-driving trucks, we were always intending to build a marketplace that would allow self-driving trucks to flourish."
Uber Freight isn't the only competitor that Amazon will face. It will also be going against traditional trucking companies like J.B. Hunt as well as startups like Convoy and Trucker Path. However, Amazon does have a distinct advantage; it will never have to worry about finding products to ship. In one recent year, Amazon shipped around 608 million packages — that is an average of more than 1,000 packages per minute! Drivers are bound to be attracted to this seemingly endless supply of work.
What Will the Impact Be?
It is difficult to say what the impact of Amazon's new app will be. It may affect the availability of trucking jobs with some of the big players in the industry. It could also impact the prosperity of major names in trucking. After Business Insider first made Amazon's plan public, C.H. Robinson's stock went down by over 2 percent.
It's also worth noting that Uber uses independent drivers, not employees. This may mean that the drivers who use the new trucking app will be independent Owner Operators who are, in effect, the proprietors of their own small trucking businesses.
At this point, Amazon's new app is mostly an object of speculation. All the major players in the trucking industry are likely to pay close attention as more details are unveiled.