Ep. #40: Solo - Uber Freight announces Broker Access - My Perspective

We're shotgunning this episode because this morning I woke up and I walked out to my couch in my underwear , I might add and opened my phone , checked a couple apps , one of which was LinkedIn , and I saw a post by one , brooks McMahon , vice President of Emerging Products and Business Development at Uber Freight , and his post was about the latest and greatest tool

that they are now offering to brokers , and it's called Broker Access , and essentially what this tool is is a way for brokers to access Uber Freight's capacity that they've developed over the last seven years with their own brokerage and with TransPlace's brokerage and TransPlace's managed trans business .

So with all of those , they've developed a large , large capacity pool and they're saying , hey , why not offer it to brokers ? And I think I understand the idea of wanting to leverage every part of your business , every resource . You have to make as much money as you can .

Well , I don't think making money has ever been their MO , but I understand the thought process of saying we have all this capacity , why not open it up to our competitors , even though they don't want to call them their competitors ?

I think this article , I think you should read the article , I think you should check out the video and learn as much as you can about broker access and make your own opinion on the tool .

As I sat there in my underwear this morning , I read what Uber announced and I thought this is ridiculous and , if I'm being honest , that was probably the first word I thought of . This is double brokering or co-brokering , whichever one you want to use , it's the same thing in my mind . I think it's ludicrous .

This is a separate point that I want to talk about for a minute . So as I sat there , I typed out my own post and I condemned the concept and I didn't mean to light the fire that I did .

I guess I should have known that was a possibility with what I was doing , but I did make a commitment to myself to be less inflammatory on LinkedIn a while ago and to stop engaging with people who I thought were just engagement farming and just posting shit to post shit .

I try to use LinkedIn to add value , to provide insight based on my experience , my opinions on what's going on in the industry . I've tried to use it to help people understand who I am and what it would be like to do business with me , because that's what I think LinkedIn is for is for business , for connecting with people in business .

And I did tell myself I would try to avoid inflammatory , post-controversial stuff and I broke that rule this morning . I kind of feel bad about it a little bit . I didn't mean to rain on Brooke's parade . I mean I know I did rain on his parade . I didn't mean to rain on his . I can't say that , I can't . I mean forget it . Let me move on .

I think that this is a tool designed for brokers to source capacity . And if Uber was simply a software as a service solution , capacity as a service solution , if that was their core business , this would be a wonderful tool . In fact , I think they should make it their core business .

I think DAP is no offense to DAT , but I think it's the most disruptible opportunity in the industry . I just think they have not really had their foot on the gas pedal for the last decade . It's kind of just we're coasting because nobody has done anything better .

Nobody has been able to get better access or build a better network of brokers and carriers to participate with . Now there's a concept Shippers hate knowing that brokers use the DAT and I actually think that hatred is a little misplaced to an extent . Actually , I think it just needs context and the right way to say it is .

If you read Brooks' article , he makes comments about how , essentially , brokers should use every tool available to them to procure capacity , and that's what this is . It's a new tool . They have , in his words , tens of thousands of carriers , a lot of really good owner-operators , small carriers . That's kind of how they built their network .

Convoy was very similar with the smaller carriers , owner-operators , and he's basically saying hey , if you've got a carrier team , let them focus on mid-size to bigger carriers and we'll handle the little stuff for you . And I get what he's offering . The problem is they are a competitor . They're a direct competitor . They are a freight broker .

That is where most of their revenue comes from , not margin , because they've lost hundreds of millions of dollars building this thing . Apparently it's billions .

I got a text after my post this morning with one word from someone close to this situation and the only word they said was billions , and he was correcting me for saying that they had burned through hundreds of millions . He said it's actually billions .

Regardless , the point is , it's a shit ton of money they've spent to build this massive freight organization , this massive freight organization . I should probably have prefaced this by saying much to well , whether or not you want to believe me , I am not an Uber hater to my core . That is not what I am .

This is maybe the third time that I've said something negative about Uber . Maybe it's fourth or fifth . It's happened more than it has with any other company . That is a fact , but I believe every negative comment I've made about Uber was fair . I also think it's my job as a podcaster . Did I say podcaster , whatever ?

As a podcast host , podcaster , I guess I can be as jaded as I want . It's my show . I can do whatever the hell I want , but it's not what I want . I want to be honest , I want to be fair .

I want to let companies come on here and tell me about what they're doing and share with the audience what they're doing , and I want to poke holes in things that I think are not truthful , but I also would like to do it in a respectful way , and my only concern is I feel like I wasn't super respectful in how I posted about Uber today and I think that's

where I seem jaded and maybe I am a little , but I'm not . It's largely because I feel like there's been deception at points and I think this is a deceptive practice . There's nothing . This article that has been written is really well written .

With respect to all the benefits of this program in terms of the capacity they can offer , how to use it , it's well written . It's weird to me that there's not a single comment made about the fact that they are a competitor . Why , why not address it ? Be honest with us , be transparent . That's always what has frustrated me about .

It's what I hated about Convoy . Convoy had incredible marketing , which is why I'm not surprised this , coming from Convoy that this is packaged how it is . The first few sentences of this article are if you're in logistics , you know transformation is constant , evolution is a must . Resilience is essential .

This sounds like we're about to find out about the coolest new thing in history . Instead , we are learning about a tool that is double brokering . There's no ifs , ands or buts about that . Well , the ifs , ands or buts are on the definition of double brokering , so let's talk about that for a second .

People have argued today in my you know , I made my inflammatory post and it got 100 comments literally . And a lot of the comments some of them are about the notion of what is double brokering versus co-brokering , and the argument is that double brokering is when you give a broker gives a load to a carrier and that carrier brokers the load without authority .

Thus it's illegal . And their argument then is that co-brokering is when there's a contract between two different brokers who agree to broker the freight twice . Sure , let that be the delineation . They're both fucking wrong .

No-transcript Brokers have always , always had a bad reputation , and that's what pisses me off about the marketing tactics we've seen over time from the freight tech companies , who position themselves as one thing when it's really another or just deceptive tactics . One of the times I got upset about Uber is when they announced free quick pay for all their carriers .

This is how they started the business free , quick pay for all carriers . That's a great offering to a carrier , but the intent was never to keep it free forever . It was just to suck in the capacity , get them locked in , and then now it costs , I think , 2% to get paid in two days before you get paid for free in like an hour .

That never was going to work . It never was going to scale . It's bait and switch tactics . That's what it is . It's hard not to see that and be frustrated and feel like when these carriers are pissed at me as a broker , it's because of stuff like that .

A few years ago , when I'm still with Molo , I did a company-wide meeting and I asked one of my old owner-operator carriers to come on to the company-wide meeting and just have a conversation with me in front of my company .

I wanted to expose not all people are carrier reps , so I wanted them to just get a feel for what it's like to work with an owner-operator . It was a guy named Peter Achukwu and his wife Catherine .

They were from Nigeria and they had migrated to the Atlanta area and Peter was a driver and his wife Catherine was the dispatcher and we did a lot of loads together , probably 20 loads a day . Sorry , 20 loads a month , which is about the maximum you could probably do with an owner op , unless it's all like local stuff .

You could do multiple in a day and there was never like a question of if he would take the loads I mean , it was usually like I'd give him the load for the weekend , he would take them , but like we negotiate rates and all that stuff , it was fine . But almost never did he take a load from anywhere else .

And I asked him on this company-wide meeting why did we have such a good relationship ? Why did it work between you and I ?

And he said because you were always honest , and what I mean by that is you would call me and tell me that you had a Coke load picking up in Atlanta at a facility that is not easy to work with , picking up in Atlanta at a facility that is not easy to work with , especially if you're late . You wouldn't tell me it was open hours from eight to midnight .

You would tell me you already missed the appointment , as in our company had missed the appointment and we needed you to go be a working and it was probably going to be a while and it was not going to be a fun experience .

And it was not going to be a fun experience but we'd get you an extra couple hundred bucks , 150 bucks , whatever it was , and does that work ?

He was like I just appreciated that you never tried the oh yeah , it's first come , first serve , just to get me to take the load and show up at the facility and then I'm stuck there , so I might as well take the load , even though you lied to me about the intent on the way .

That is how you have good relationships with anyone in the industry , on any side . You're just honest . You understand that there's hard stuff in our space , but the reason that we have such negative connotations for freight brokers is because of behavior that is deceptive in nature . It's that simple .

So the challenge to me is will Uber come out and say to all their shippers like , hey , we're doing this with each of these brokers , here are the brokers we're doing it with . Will the brokers who are going to sign up for this , will they tell their shippers hey , I'm tendering the loads you give me to Uber . They are my capacity tool ?

If the answer is no , if a broker won't do that , then this is a bad tool and we all know that this was not built . Tell me I'm wrong . So I'm going to rant and then , if you tell me I'm wrong , I'll put my thumb in my mouth and shut the hell up . But the reality is brokers aren't going to admit that .

They never will , because they'll lose the business because it's unacceptable . Shippers do not want brokers procuring capacity from other brokers . It's that simple . So I think if Uber wants to figure this out , they should get rid of their brokers . It's never made a dollar . It's never even come close .

It's lost so much money it has for better or worse no , I don't need to say that but it has never made a dollar . It's never even come close . It's lost so much money it has for better or worse no , I don't need to say that but it has never made money . Uber has incredible people , some of the smartest in the industry , and you can't play both sides .

So flexport , which is which bought convoys um , old brokerage technology is in a similar dilemma , but it is different . And I know it's different because I have friends at all of these companies , some of which I talked to . I have guys at Uber and Flexport that I talk to every day and they've asked me about this before .

And as I talked to the individual who oversees this from Flexport , it was a very intense conversation around like , should they or shouldn't they be selling to shippers while also selling to brokers ? And he was adamant we shouldn't be selling to shippers and brokers . That's where it gets wrong . If this is purely a tool for brokers , it's an innovative new solution .

It's weird how you got there , because you had to . You know Convoy spent a billion dollars to develop a capacity network that can now be a standalone load board . That's wonderful for Flexport , because they spent less than 1% of that I would guess because they bought it for scraps but they now have a meaningful tool that I think could work .

I don't know if the cost makes sense . I haven't looked at the cost . My understanding for these companies is at least 25 bucks a load , but as much as 50 , 70 , 80 , 90 bucks a load . There's not enough margin for us to be sharing it three ways . What's going to end up happening is carriers are going to get less money . It's just that simple .

How many hands can there be in the cookie jar ? The carrier's got his hand here , the broker's got his hand here and I don't have a third hand for Uber to put theirs in . But that's what's happening and I think to pass this off as just another resource is underhanding . It's underhanded it is .

It doesn't sit well with me , but clearly I've tried to have Uber on the show and I hope they will come on the show . I can see why they maybe wouldn't after this , but I think I would love to learn more about all the things Uber's doing , and I've given credit to Uber a number of times .

In my episode with Rob Haddock , we talked about how Uber created facility ratings , which is similar to how if you get an Uber and your driver does a good job , you give him five stars and you can get feedback .

Uber applied that concept to freight and they were the first to ever do it and they did it in a way that's super efficient and effective Great , that's awesome . In a way that's super efficient and effective Great , that's awesome . And they should sell that .

They should sell that to get opportunities with customers is what I mean by they should sell that Because it makes their business better . It makes their shipper partner's business better . It's good feedback . I had Alyssa Correale on the show . Correale on the show , correale on the show . She was incredible . I loved getting to chat with her .

I didn't bring her on because she worked at Uber . I brought her on because she's a fascinating person and we had a great conversation . We talked about Uber a lot . We talked about PowerLoop and that could also be a great tool , great resource for their customers , and I've engaged with Uber's marketing team .

I spent the summer trying to get them to agree to bring someone on the show , and I wanted an in-depth understanding of their business . I wanted to come to the Uber office , sit with their team , see the whole thing and then have a conversation on the record about what they're building .

I think they're one of the more fascinating organizations in our space , for better or worse . I don't know the answer .

Yet If the thing never makes a dollar and then gets sold off for pennies on the dollar , then it was a massive waste of time , unless some of the tools live on , like in convoys , I think I mean there's a tremendous fallout , in a good way , of convoy talent that has gone off to do new things in the last year .

Look at Ryland Hawkins working with my brother at Cargado . They're building something special over there . That's a true load board . That's what Uber should do . You've got tens of thousands of carriers . Give up the brokerage . It ain't working . Be a managed transportation company . Be a load board organization . Be Yelp for freight .

Create a Yelp tool through your Uber ratings , but stop trying to broker freight . Be agnostic . If you do that , everyone all these small brokers will sign up . But right now , these small brokers that are going to sign up should be scary Because if their shippers find out this is how they're doing business , I don't understand how they have longevity .

I don't know if these small brokers have longevity to begin with . I mean , we're getting to a place where they're going to outsource 99% of their business . Their appointments will be scheduled by queued , the inbound calls will all be answered by Happy Robot or Fleetworks , and Uber will cover all the loads . So what the heck are the brokers doing ?

You certainly don't have any carrier reps . You don't have ops reps , or many of them . And then you have a couple of salespeople . And what are you selling ? You're selling everyone else's tools . What's different about you ? I think capacity is something that has to stay in-house . You pull it from other places and then you want to own it .

You own it by developing really strong relationships with the carrier , by having good freight to give them as consistently as possible , and that's why you need a stellar sales team out there getting new business . And on the carrier side , you need strong people who can develop relationships all across the board .

I understand it is not as effective in terms of time to work with owner-operators . But man , is it fun If you get good ones in your network . I mean , I booked 30 loads a day , all on owner-operators . It's possible , it's doable . I should correct that I booked 30 loads a day and like 25 of them were on owner-operators .

I had a few bigger carriers that haul booked 30 loads a day and like 25 of them were on owner operators . I had a few bigger carriers that hauled some loads a day . It's doable and I understand people want to do more with less .

But this one piece , this one slice of passing the load to another broker to procure the capacity , I think is where we cross the line . I am happy to have Leo or Ron on the show to talk about this , to talk about the entire business . I hope he'll come on . I understand why he wouldn't , but I hope he will .

I think that if the election taught us anything , it's that podcasts have power and discourse when we disagree is a great way to understand one another better . I am not someone who can't be convinced of something . I will ditch my opinion in a minute if you can convince me that this makes sense , like I think .

I would start and end on the shipper question Is a shipper okay with this ? Are most shippers going to be okay with this ? Because I'm sure you'll find a few here and there who just say , I don't care , give me the lowest price and okay , fine , there's always going to be these outliers . You've got this massive industry and there's a hundred million .

There's so many different ways to do this , but if I'm a shipper , here's how I think about this .

Moving forward , I've always believed that shippers should be way more interested in how brokers procure capacity , and I think there's a ripe opportunity for someone like Good Shipper ISO to go deeper on their tooling that they're offering and get into the mechanics , the makeup of a carrier network , so you could look at the size of the carriers you use , how often

you use each carrier , your average loads per carrier , per carrier's load , whichever it is . There are a number of things you can look at that would indicate network strength and I think , if I'm a shipper , that's the next thing that I'm going to start to evaluate , because there's not a need for you to have 50 brokers .

You should have anywhere from three to at most like 20 . If you have a really big business , you don't need more brokers than that , but you've got to pick out of 15,000 or 20,000 , wherever the hell the number is . Now . I know I used to say a bigger one , but I just corrected it down . And in making those choices we all sound the same .

But it's going to sound a little different when people stop saying I have a really strong carrier network and say I have Uber's carrier network , but I don't think that gets you in the door , I don't . So I think there's more to come

. On carrier procurement , I think it's one of the most essential parts of brokering literally like 50% of it and the idea that a broker is just passing that off to another broker is so crazy to me . So I'm sorry for maybe reiterating myself so much , but this is my perspective and I could easily be wrong . Prove me wrong . Prove me wrong .

You know , prove me wrong . Show me that you grow this thing and make Uber a super profitable organization that does good , takes care of carriers , is honest and open about how they're managing the business . That's , you know . That's what I would like to see out of the organization as it continues to .

You know , invest billions , and that's all I would like to see out of the organization as it continues to . You know , invest billions and that's all I got , so I hope this was insightful . I hope this gave you an opportunity to see a different side of the show , as we just tackle a very specific concept . Have a good one .