Uber For Trucking Challenges – Amit Sekhri took up trucking in the thick of the Great Recession, drawn in part by the freedom of driving the open roads. He was prepared for long hours and weeks away from home. But two of his biggest—and least expected—gripes were the constant phone calls and late payments.
Like many truckers, Sekhri booked his jobs through freight brokers, a class of intermediaries who do most of their business by phone. And many have a bad habit of paying late.
Then he discovered an app called Convoy. It lets him select nearby loads listed by shippers and get paid a day or two after completing a trip. It uses a phone’s GPS to estimate a driver’s arrival time for pickup and tracks where he is throughout the route.
For these reasons, Convoy Inc. is often described as “Uber for trucking”—a moniker that took hold before the real Uber set up a competing business and was gripped by a corporate crisis.
Sekhri, 30, now drives his own truck and serves as a dispatcher for four drivers who deliver orders through Convoy, traditional job boards and occasionally Uber Freight. He credits Convoy with solving some of his main grievances with the job.
“It’s pretty easy. You like the price, you accept it, you assign it to a driver, and you can track them. I don’t have to call the driver and say, ‘Where you at?’” Sekhri says. Convoy also lists accurate pickup times, letting him squeeze in a shower or meal outside his truck.
But Sekhri has a bigger problem: Job rates are declining fast. App reviews for Convoy are riddled with complaints from drivers about low prices. Sekhri and two other Convoy drivers who spoke to Bloomberg echoed those concerns. One of them shut down his business in March.
Sekhri says he uses Convoy for 10% to 15% of his loads—only when prices meet his needs. “I’ve got four kids to support,” he says. “I’m still hanging in and hoping it will get better.”
This isn’t unique to Convoy. Rates are falling across North America after two years of increases. Spot demand, which excludes long-term freight contracts, plummeted 27% through Oct. 25, and most drivers aren’t expecting business to improve over the next six months, according to market research from Bloomberg and Truckstop.com.
Those who bought flatbeds during the surge are now struggling to find work and make auto payments.
For Convoy, the company risks drawing comparisons to Uber in less flattering ways: drivers grousing about getting squeezed and a business model that has yet to turn a profit. One possible remedy is a dramatic expansion of its bidding system that Convoy plans to announce Tuesday.
It would create a sort of EBay for freight, where drivers can submit offers for a vast number of jobs listed by shippers. Convoy says this will allow drivers to find more work and reduce trips without a load, but the theory isn’t proven. It could just as easily drive down prices and exacerbate the pay problem.
Dan Lewis, the chief executive officer, says he’s sympathetic to concerns from drivers, especially small trucking companies that are often hit the hardest. He says he can’t control the market, but Convoy can help make it more efficient for drivers.
“They’re just thinking in their head, ‘Hey, I did this job last year, and I got $1,000. Now I’m getting paid $900. Why am I being paid less?’” Lewis says. “What we want to do is help them reduce their costs.” Continue Reading