Is “Uber”-Style Delivery a Threat to Freight Brokers?

Phil Cohen

Uber has made headlines in dozens of big cities around the country as a user-friendly, on-demand alternative to taxi and car services. The introduction of its new UberRUSH service, indicate that a similar trend may be on the horizon for commercial trucking.

Subscribers to Uber can use their smartphones to request pickup at their location and transportation in the city for a clear price and a much shorter wait. Users can see what active drivers are in the area, how long until their pickup, and even split fares and complete payment using the app. They can also choose between five levels of car service depending on where they’re going and how many people need to get there.

Drivers, meanwhile, are independent contractors who set their own hours and prices and work directly with their passengers rather than reporting to a car service. Uber verifies their background and driving records, and users are able to rate their experience after each ride.

Earlier this month Uber introduced UberRUSH, an on-demand courier service that users can access via a smartphone app similar to the classic Uber service. Though the service is currently restricted to Manhattan, its success there could prompt rapid expansion.

Currently, the locality of the trend toward disintermediation has little potential to disrupt freight brokers handling long-distance or interstate loads. However, brokers who specialize in local delivery may find themselves in a battle for supremacy if these and future offshoot businesses gain traction. Factoring for freight brokers can help brokers shore up their cash flow and begin investing in larger-scale operations to minimize their risk going forward.

Check out this article about the app for more information.

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Phil Cohen

Phil is the owner of PRN Funding and sister company Factor Finders. He has been an authority in the factoring industry for over 20 years, serving on the board of directors for several factoring associations.

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