TRUCKING On-Demand
Seattle Startup CONVOY: Moving Freight with a Click
When it launched in 2015, the Seattle-based truck technology company Convoy aptly described itself as “Uber for trucking,” designing an app to match trucking companies with shippers ready to move freight. Uber, itself, had (surprisingly) shown no interest in what was a $700 billion trucking industry at that time, so Convoy felt confident making that claim.
A year and a half later, things have changed dramatically. Convoy isn’t the only tech startup interested in revolutionizing the trucking industry. Amazon is reportedly working on a similar service that would pair drivers with companies that need goods delivered. More significantly, there’s a new player in the field that can more confidently describe itself as the Uber for trucking: Uber. The embattled ride-hail company launched Uber Freight in May, with the promise to “take [the] guesswork out of finding and booking freight, which is often the most stressful part of a driver’s day.”
If competition from some industry heavy weights is cause for anxiety, it doesn’t show. Convoy announced in July that it had raised $62 million in its Series B fundraising thanks to some heavy weight investors of its own: Cascade Investment, Mosaic Ventures (Bill Gates’ investment fund), and Barry Diller; LinkedIn co-founder Reid Hoffman, on behalf of Greylock Partners, also invested again. Previous Convoy backers include Amazon CEO Jeff Bezos and Salesforce CEO Marc Benioff.
Indeed, that list of luminaries inspires confidence in Convoy CEO Dan Lewis. “Uber’s definitely in the freight space,” Lewis says. “It’s great validation for this space. It’s really us and them, honestly, at this point… We’re approaching it with a technical background. They’re approaching it with a very manual approach.”
Uber purchased a trucking brokerage called 4Front Logistics in Chicago last fall in an effort to break into the long-haul freight business. These types of brokerages connect manufacturers & retailers that are shipping goods with truck owners & fleets. But Lewis noted that Uber’s new brokerage relies on a manual, phone-operating system to connect drivers to manufacturers, while Convoy operates on a completely tech-driven system. “So I think we’ve taken a slightly different approach in terms of how to automate the process, the pricing, how to identify the right truck using this technology,” he said. “We’ve done that since day one.”
Lewis acknowledged that Uber has a “very well-recognized brand with a lot of PR money behind it,” but is still recovering from a string of self-inflicted scandals and major exodus of top executives, including CEO Travis Kalanick. Uber’s troubled year has led Convoy to downplay its “Uber for trucking” tagline. “It just became a brand people were uncomfortable being affiliated with,” Lewis said. “The industry in general is moving away from that term.”
Integrating Autonomous Driving and On-Demand Technologies
Motivated by the lucrative possibilities inherent in self-driving trucks, Uber bought the automated truck company Otto last year — a move it came to regret after Otto’s top executive, former Google engineer Anthony Levandowski, was accused by Waymo of stealing its self-driving secrets. Uber and Google remain embroiled in a bitter lawsuit over the allegations.
“There are going to be a lot of different options with regards to applying self-driving to existing fleets,” he said. “It’s going to be a multi-year transition, in terms of going from a completely manually operated truck with someone driving it to autonomous trucks. And there’s going to be this long transition with the role of the driver evolving. Probably the driver will be in the truck for a very long time doing a lot of tasks.”
Lewis hopes Convoy can assist and evolve as it works with the trucking industry to better incorporate all automated technologies, such as how to determine which system to use, which trucks to buy, how to retrofit trucks for self-driving, etc. “As that’s happening, Convoy is going to be incorporating that as a capability into our system,” he said, “and it’s going to evolve every year.”
Alkane thanks Andrew J. Hawkins, writing for THE VERGE for the content of this article.
Alkane Truck Company is currently raising capital on the crowdfunding platform StartEngine. Find out more here: https://www.startengine.com/startup/alkane
