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Prime Mover Magazine

Uber Freight uptake slow due to market resistance

Having set out to revolutionise freight brokerage, Uber’s new Freight service is reportedly hitting more obstacles than anticipated.

According to US industry resource, Fleet Owner, the online service has been taken up at a slower pace than anticipated – also because “the trucking industry as a whole” is still resistant to it.

What’s more, market competition may have been more intense than expected, with more and more new mobile-based freight apps spreading across the industry, according to Wallace Lau, Industry Principal at Frost & Sullivan.

“A lot of what the biggest challenge for this market has been is that a lot of people in the trucking industry still don’t know what digital freight broker technology actually can do for them,” Lau told Fleet Owner, saying there was “pretty big resistance” to it.

“This entire industry is very traditional in terms of how it wants to move things [so] these new companies coming in have had a very difficult time trying to get their name out there and getting their footprint established in this market.”

Last year, Lau published a study claiming the mobile-based freight brokerage market, which generated approximately $100 million in revenues in 2016, was expected to grow at a compound annual growth rate of 74.65 per cent by 2025 and generate $26.40 billion in revenue for the entire market.

Now, Lau told Fleet Owner, it looks like those numbers are moving a slower than expected. However, he is still confident the market will take off at some stage.

"With Uber’s name coming in, I think it really helps open up the market and open up the eyes of the trucking industry to this emerging trend that will affect them in the near future.”

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