Even with new funding, Uber is asked whether Uber Freight fits

The question came up even though Uber Freight, just a bit more than one month ago, raised $500 million from Greenbriar Equity Group, putting the valuation of the digital brokerage at $3.3 billion. 

Chai acknowledged that the two largest segments of Uber Technologies, its Mobility division and its Delivery group, had obvious synergies as drivers can choose to work for both segments. The analyst who asked the question about where Uber Freight fits wondered whether that division is “operating in a vacuum.”

Chai said there is overlap with some of the back-end technology that is being used by Mobility and Delivery, but conceded that it is not a consumer-facing business like its sister operations. But, he added, “we think it’s attractive.”

With the recent fund raising, Chai added, “we believe it will allow us to fund Freight until it’s profitable.”

He said the Freight group continues to “scale and grow.” While he said there might be a time when the company no longer sees Uber Freight as a fit, “right now we like what we see from the Freight business.

Khosrowshahi challenged the idea that there were no great synergy possibilities with Uber Freight. 

He said the group does benefit from Uber’s marketplace and pricing technology that is produced by its current technical staff.

Khosrowshahi also noted that the Uber Freight business is now focused on delivery from the warehouse to the store. “You can imagine a world where we start chaining together warehouse to last mile, and I think that’s a solution that we are uniquely suited to bring,” he said. 

In its prepared statement announcing earnings, Uber touted the Freight segment’s new Uber Freight Enterprise platform, a significant addition to its offerings that allows shippers greater control over their freight. 

Overall, Uber’s net loss of 62 cents per share missed Wall Street projections by 2 cents per share. Revenue of $2.8 billion was down 20.4% from the corresponding quarter of 2019 and missed projections by $380 millon. Uber’s stock was down approximately 1.9% after the close, sitting at $41.15 at approximately 6:25 p.m.

The earnings call gave Khosrowshahi his first opportunity to speak publicly about the victory of Proposition 22 in California, which was heavily backed by Uber and took app-based drivers like those at Uber and Lyft out from under AB5, the law that would classify more gig workers as employees.

“We should be aiding gig work to make it better rather than getting rid of it in favor of employment,” he said. Uber isn’t done, he added. “We will go forward with other Prop 22-type laws.”

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