Ridehail giant Uber is making a big push to beef up its trucking business by purchasing logistics service Transplace for about $2.25 billion, intending to turn its Uber Freight unit into a top player in arranging and tracking shipments of goods.
Uber Freight said it has an agreement to buy Frisco, Texas-based Transplace for cash and $750 million of Uber stock from private equity firm TPG Capital. Assuming the deal clears regulatory approval, the company expects the deal to create one of biggest tech platforms for shippers to manage the flow of goods.
“This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most,” Uber Freight chief Lior Ron said in a statement.
Trucking and logistics remains a booming industry amid seemingly endless growth in demand from retailers and consumers for ever faster delivery of goods. Freight hauling by trucks is a massive business, generating gross revenues of $791.7 billion in 2019, according to an American Trucking Associations estimate. That’s fueled a push by tech companies, both makers of software and services to book and manage shipments as well as developers of autonomous trucks, into the freight business. Uber shed its autonomous truck program three years ago, but has continued to build up Uber Freight, which books freight deliveries.
“Our expectation is that shippers will see greater efficiency and transparency and carriers will benefit from the scale to drive improved operating ratios,” Transplace CEO Frank McGuigan said in a statement. “All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment.”
Uber in May reported that revenue for Uber Freight jumped 51% in 2021’s first quarter to $301 million, the company’s third-biggest source of sales after delivery and ride services.
Shares of Uber rose less than 1% to $47.82 in New York Stock Exchange trading at 12:42 p.m. in New York.