What’s the deal with smartphone brokers?

June 15, 2018

John Bendel


Convoy and Uber Freight are competing big time to attract owner-operators. The two web-based, app-powered brokers have added new services for carriers, particularly owner-operators and small fleets. But how well are they doing overall?

Convoy and Uber aren’t the only smartphone brokers. They may not be the largest or even among the largest. We can’t know because no one in this business releases figures on how much business they do. Big, established brokers like C.H. Robinson and Coyote Logistics have apps too, and they also have lots of contract business directly with big shippers. Convoy and Uber are vying for that freight, but meanwhile, they pretty much serve the spot market.

Even so, these two have high public profiles – Convoy because of its celebrity investors, like Bill Gates and Bono, and Uber because, well, it’s Uber. So when they make announcements, they get attention, and both have been doing just that.

Seattle-based Convoy made a splash – or at least some respectable ripples – with a recent announcement about detention pay. If you’re using the Convoy app, they’ll pay $40 an hour after two hours of waiting time – and they’ll pay quickly, pretty much no questions asked. Convoy caps its detention pay at five hours for a total liability of $200 (Uber also pays detention at $75 an hour with a cap of 4 hours for a maximum payout of $300).

Last month, Convoy announced what they call Universal Trailer Pool, a fleet of trailers presumably preloaded by shippers so you supply power only. That gives you access to the same kind of preloaded business usually reserved for big carriers with lots of trailers. “This gives (owner-operators, small carriers) access to billions of dollars in new shipments and saves time waiting,” Convoy says on its website.

No, you won’t see Convoy-branded trailers – at least not for a while. According to Kristen Korecki, Convoy’s vice president of carrier experience, the trailers in the pool are leased. The pool itself is limited to California and the West Coast for the time being.

Uber Freight has been making announcements too. In March, San Francisco-based Uber announced Uber Freight Plus, a program that offers discounts on fuel, tires, parts, and a new International truck. Sounds great, but it’s not simple. In some cases you have to have an Uber Freight Fuel Card or someone else’s card. There are other requirements too, so read the small print.

Uber also has launched something called Fleet Mode, Uber Freight for fleets of 10 trucks or fewer, which enables dispatchers to book loads for their drivers. It is a definite advantage for the small guys, especially if the boss is driving one of the trucks. It’s all in the palm of his or her hand.

Late last year, Uber Freight introduced three programs designed to attract truckers. According to Uber, Take Me Home highlights loads that will do just that. One called Reloads highlights loads to be picked up near delivery sites. Another called Post My Truck matches drivers with “available loads that meet their specific needs” – whatever that means.

So how are Convoy and Uber Freight doing? In April, Forbes ran an article on its website headlined “Is Uber Freight on the Verge of Going Out of Business?” Uber lost $4.5 billion in 2017, up from $2.8 billion in 2016, Forbes said, suggesting the company should be focusing on its core ride-hailing business. Otherwise, they made no case for shutting down Uber Freight beyond quoting competitors knocking it.

No such news regarding Convoy. Its big-name backing adds up to a total of $80.5 million, according to Crunchbase, a startup news source. That’s a pile of money by most measures, but less so when compared to Uber’s billions. Both need to attract corporate contract shippers as well as truck capacity, and they’ll be up against the biggest, smartest brokers and 3PLs in the business. So they’ll both be losing money for some time to come.