In the wake of reports its systems were breached, Uber is reassuring users no “sensitive user data” was accessed.
Uber acknowledged Thursday it was investigating reports of a data breach after a hacker posted a message on the company’s Slack channel saying they had hacked the company. Screenshots of the breach were shared on Twitter:
Microsoft has identified an issue with receipt emails from Uber, as well as some others, that are causing Outlook and Word to hang and/or crash.
A recent update seems to be the cause of the issue, and will result in Outlook and Word not responding when certain emails are opened. The issue seems to only happen when opening emails with complex tables.
When opening, replying, or forwarding some emails that include complex tables, Outlook stops responding. The same table contents will also cause Word to stop responding.
This issue started in Current Channel Version 2206 Build 15330.20196 and higher. It also occurs in current builds of Beta and Current Channel Preview.
The company has already issued a fix that will be released to the Beta channel soon. In the meantime, users who can’t wait for the fix will need to roll back to the previous version.
Uber is the latest company to signal its willingness to accept cryptocurrencies as payment, but not until some major changes take place.
Companies across multiple industries have begun accepting crypto as payment. Tesla was one of the biggest companies to accept crypto before backtracking over environmental concerns. That view has been echoed by other organizations, such as Mozilla, which have stopped accepting crypto over the same issues.
According to Bloomberg, Uber CEO Dara Khosrowshahi said his company would also like to accept crypto “at some point,” before saying “this isn’t the right point.”
Uber is waiting until crypto transaction fees are lower, reducing its environmental impact.
“We’re having conversations all the time,” Khosrowshahi said. “As the exchange mechanism becomes less expensive and becomes more environmentally friendly, I think you will see us leaning into crypto a little bit more.”
Khosrowshahi’s statement is just the latest indication of the challenges crypto faces before it gains widespread adoption.
“Uber built a very anti-fragile business in regards to having the Eats business and having the Rides business,” says early Uber investor Jason Calacanis. “When the Ride’s business went down that kind of indicates people are staying home. When they stay home they use Uber Eats and increasingly Drizly, Cornershop, and Postmates. Watching the Uber team take on this challenge of the pandemic year has been really impressive.”
Early Uber investor Jason Calacanis says that unlike Lyft, Uber built a very anti-fragile business with the combination of Eats and Rides and has become relentlessly focused:
Uber Built A Very Anti-Fragile Business
What we’re really going to see here is that Uber built a very anti-fragile business in regards to having the Eats business and having the Rides business. When the Ride’s business went down that kind of indicates people are staying home. When they stay home they use Uber Eats and increasingly Drizly, Cornershop, and Postmates. People are ordering groceries. Watching the Uber team take on this challenge of the pandemic year has been really impressive.
It reminds me a lot of Disney and how they got focused around Disney+ as the center of the organization. They looked at what was happening in the pandemic and said parks are great, merch is great, movies are great, let’s just put everything into Disney+ and accelerate that. Look what happened to that company. I’ve got to give Dara Khosrowshahi a lot of credit. He got rid of a lot of the noise like self-driving cars which are a multi-decade kind of vision. He sold off the places where they weren’t going to be in first, second, or even third place. He did JVs and sold off those businesses like Russia and China, etc. That’s well documented.
The Space Can’t Have 50 Players Losing Money
They found a new really inspiring footing which is if Amazon is two-day delivery going to one-day, Uber’s is one-hour delivery going to 10-minute delivery. That is Travis Kalanick’s original vision for Uber. When I met with him when he was building the company and I was the third or fourth investor his vision was this is a logistic company. We took atoms in the world made them bits on the internet. Now we’re going to take bits on your phone, an app, and we’re going to move atoms in the real world. That was his original pitch. Here we are in decade two where I’m still own the same shares I’ve had since I bought them for a penny or whatever back in 2008 or 2009. I remain super bullish. I have a huge position in Uber and I’m going to hold it for the next decade.
It’s fairly obvious that there are acquisitions and consolidation that need to happen in the space in order for it to be profitable. The space can’t have 50 players losing money. We’ve watched Lyft, Postmates, Doordash, and everybody, say that we’re going to have to charge what this product is worth. We’re going to have to stop burning money. There’s no free VC money. The public markets are not down with lose money forever and grow. I think we found a happy medium here between what public market investors want, profits, and what private market investors want, growth.
Uber Has Become Relentlessly Focused
I think Dara has done an exceptional job. Some things will come from acquisitions but most of it has to be just relentless execution and focus. That is the inspiring part of what happened here. Uber has become relentlessly focused. Things that were coming in 10 or 20 years like self-driving in all likelihood will be a commodity business. In 10 or 20 years there’ll be five companies who have that technology. VTOLs are very fascinating and very interesting, but again that’s probably seven, eight, nine, or ten years off as a very niche product.
Uber Built A Very Anti-Fragile Business, Says Jason Calacanis
Uber, Lyft and other ride-share and gig economy companies were dealt a major blow, with a judge ruling Prop. 22 is “unconstitutional.”
Prop. 22 allows ride-share and gig economy companies to classify their workers as independent contractors, meaning the companies are not required to provide health insurance or benefits. The law’s passage was a major win for the companies, as California law was on the verge of classifying them as employees.
Superior Court judge in Alameda County, Judge Frank Roesch, has now put Prop. 22’s future in doubt, calling the law “unconstitutional,” according to Mashable. He said “it limits the power of a future legislature to define app-based drivers as workers subject to workers’ compensation law.”
Needless to say, Uber and Lyft will appeal the decision, meaning nothing will change immediately. However, Judge Roesch’s ruling is certainly cause for worry for the impacted companies, and good news for their “contractors.”
Microsoft has hired former Uber exec Manik Gupta to help it build “world-class consumer experiences across all of Microsoft.”
Gupta was head of product at Uber, and spent a number of years before that overseeing Google Maps. Microsoft has been working to expand the consumer aspect of its business, and Gupta will help oversee those endeavors, specifically Microsoft Teams consumer, GroupMe and Skype.
“Manik’s experience… will be invaluable to us building world-class consumer experiences across all of Microsoft,” says Jeff Teper, Corporate Vice President in charge of Microsoft 365 Collaboration, whom Gupta will report to. The internal memo was seen by The Verge.
Gupta’s hire is good news for Microsoft’s customers and should be a boon to the company’s efforts.
Uber has announced a major acceleration of its grocery delivery service, now available in more than 400 cities and towns in the US to Uber and Uber Eats customers.
The global pandemic saw a dramatically increased demand for grocery delivery services, demand Uber and Uber Eats has benefited from. The company’s recent expansion is its first major one in the US, and more than doubles its footprint. Part of the expansion is a 1,200-store partnership with the Albertsons grocery chain. Albertsons also includes, Safeway, ACME, Jewel-Osco, Randalls and Tom Thumb.
“This past year has been one of incredible growth for grocery delivery,” Raj Beri, Uber’s Global Head of Grocery and New Verticals “Today nearly 3 million consumers order groceries and other essentials each month through Uber and we’re just getting started. By adding thousands of beloved grocers to our selection this year, we are fast-tracking our efforts to help Americans get everything they need from their favorite supermarket, delivered to their doorsteps.”
Uber has told staff it wants them in the office 50% of the time, as the company continues to adapt to a changed workplace.
Many companies are adding remote and hybrid work options permanently, an acknowledgment the workplace has been forever changed by COVID-19. Uber is unveiling one of the most flexible options yet, with employees being asked to work 50% of the time in the office.
What makes Uber’s stand so unique, however, is that the employees have control over how when and how they allocate that 50%, according to Reuters. For example, an employee could work one week in the office and not come in at all the following week. In contrast, many companies are requiring employees be in the office a set amount of days per week, in some cases even stipulating which days.
Uber is also encouraging employees to work away from their homes at least four weeks a year, giving employees the opportunity to experience a change of scenery.
Congress, in a political payoff to unions, have again introduced legislation to effectively make gig economy jobs like Uber, Lyft, DoorDash, etc. illegal. The difference this time is that since they now control the House, Senate, and the Presidency it could very well pass. The legislation is modeled after the gig killing bill that was passed in California and that was later overturned via initiative by the people. Unfortunately, at the national level there is no initiative process to overturn Congress.
Despite the job-killing nature of the bill the Democrat’s press release sings its praises:
“Top Democrats Introduce Bill to Protect Workers’ Right to Organize and Make our Economy Work for Everyone. Legislation addresses growing income inequality by protecting workers’ right to join a union and negotiate for higher wages and better benefits.”
The House bill was introduced by House Committee on Education and Labor Chairman Robert C. “Bobby” Scott (VA-03), Congresswoman Frederica Wilson (FL-24), Congressman Andy Levin (MI-09), Congresswoman Pramila Jayapal (WA-07), and Congressman Brendan Boyle (PA-02).
The Senate bill was introduced by Senate Committee on Health, Education, Labor, and Pensions (HELP) Chair Patty Murray (D-WA) and Majority Leader Chuck Schumer (D-NY).
The bill mimics the California bill which Uber CEO Dara Khosrowshahi said would effectively end Uber as we know it in California. The company is already losing money and it would be impossible for it to pay a minimum wage of $15 an hour plus benefits to all of its 1 million drivers. It also begs the question, does the Democrat party not realize that the very people who love Uber and who are independent contractors for Uber probably are also majority Democrat voters? After all, the gig economy was popularized by liberal San Francisco based Uber itself.
Without an initiative process at the national level, the only way to keep the millions of gig jobs alive and to keep rideshare and food delivery readily available would be for their voters to vote the majority party out of office. There really is no middle ground here. In the meantime, if this bill passes Congress and is signed by Biden the gig economy will become illegal.
In a world first, Uber will treat its UK drivers as “workers” after losing its case before the UK Supreme Court.
In February, the UK Supreme Court ruled that Uber drivers were entitled to more protections than they enjoyed as contractors. “Worker” is a classification unique to the UK, providing more protections than a contractor, but not reaching the status of an employee. Uber has been fighting similar battles in multiple jurisdictions, but the UK case was the company’s first major loss.
As a result, Uber has agreed to pay some 70,000 UK drivers minimum wage, as well as provide vacation pay and access to a pension plan.
Writing an op-ed piece for The Evening Standard, CEO Dara Khosrowshahi outlined the company’s policy evolution:
Our thinking on this issue has evolved over time, and I will be the first to admit that we’ve struggled to identify solutions that work for Uber and for those who earn on our platform.
Following last month’s UK Supreme Court ruling, we could have continued to dispute drivers’ rights to any of these protections in court. Instead, we have decided to turn the page. Beginning today, Uber drivers in the UK will be treated as workers.
It remains to be seen if the UK case will serve as a template for other countries and jurisdictions, but Uber’s willingness to make changes certainly will undermine its arguments in future cases.
Uber is acquiring alcohol delivery startup Drizly, in a deal worth $1.1 billion.
Drizly is the nation’s leading alcohol delivery service, operating in over 1,400 cities around the country. The company’s reach is an impressive accomplishment given the patchwork of alcohol laws and regulations among various states.
Uber sees an opportunity to round out its food delivery service, offering the full dining experience in-home.
“Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier. That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol. Cory and his amazing team have built Drizly into an incredible success story, profitably growing gross bookings more than 300 percent year-over-year. By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead,” said Uber CEO Dara Khosrowshahi.
“Drizly has spent the last 8 years building the infrastructure, technology, and partnerships to bring the consumer a shopping experience they deserve. It’s a proud day for the Drizly team as we recognize what we’ve accomplished to date but also with the humility that much remains to be done to fulfill our vision. With this in mind, we are thrilled to join a world-class Uber team whose platform will accelerate Drizly on its mission to be there when it matters—committed to life’s moments and the people who create them,” said Drizly co-founder and CEO Cory Rellas.
The deal is expected to close in the first half of 2021.
BP has reduced its oil exploration to 100 members, down from 700, as it focuses on renewable energy.
With climate change headlining the agendas of many countries, companies around the globe are taking drastic action to adapt and prepare for an economy based on renewable energy. Nowhere is that transformation more drastic than the very industry that has provided the fossil fuels the world has depended on.
BP is among those energy companies leading the charge, thanks to CEO Bernard Looney. Under Looney, the company has been aggressively pivoting to renewable energy and scaling back its oil exploration efforts, according to Reuters. The company is using its existing petroleum business to help fund the transition.
“We are in a harvest mode and what isn’t being said is that BP is going to be a much smaller company without exploration,” a source in BP’s oil and production division said told Reuters.
The company has been hiring staff from Silicon Valley, Toyota, Uber and more in an effort to better understand electric vehicles and other key parts of the renewable energy industry in an effort to help it better compete.
Looney’s efforts are not without risk, however, as some worry the company may prematurely slash its oil income before its investments in renewable energy pay off.
“There is so much internal change that it will be a big job to pick up the organisation and get things going,” a senior employee in the exploration division told Reuters.
There’s no doubt the company is experiencing challenges with its transformation, with the stock at its lowest point in 25 years. Looney is adamant, however, that BP must change in order to remain relevant.
“Everywhere I have been, inside BP as well as outside BP, I have come away with one inescapable conclusion, and that is that we have got to change,” he said in a webcast.
If Looney can pull off his vision, BP will be far better positioned than competitors who are trying to hang on to a dying industry as long as possible.
Researchers at Uber are proposing a new artificial intelligence (AI) language model that emphasizes positive, social interaction.
AI is one of the most important developments in the tech industry. Increasingly, is is being used in a wide array of fields, often with the goal to assist individuals in mundane tasks. Chat bots, support agents and conversational AIs are just a few examples. One challenge, however, is making AIs that people will engage with.
Researchers at Uber believe they have the solution, and have written a paper emphasizing the importance of developing an AI language model around positive, social interaction.
Goal-oriented conversational agents are becoming prevalent in our daily lives. For these systems to engage users and achieve their goals, they need to exhibit appropriate social behavior as well as provide informative replies that guide users through tasks.
The researchers hypothesized that an AI using positive interaction would encourage more engagement.
We, therefore, hypothesize that users would prefer a conversaional agent with more polite or more positive language and be more willing to engage with, respond to and persist in the interaction when conversing with an agent using polite and positive language.
Uber’s researchers tested their hypothesis in a ride-sharing environment, where new drivers’ on-boarding was guided by text messages from customer support representatives (CSR).
In this Study 1 we investigated whether and how social language is related to user engagement in task-oriented conversations. We used existing machine learning models to measure politeness and positivity in our analyses. The results show that the politeness level in CSR messages was positively correlated with driver’s responsiveness and completion of their first trip. We also found that positivity positively predicts driver’s first trip, but it has a negative relationship to driver responsiveness even after removing congratulatory milestone messages or messages that do not have any question mark, which usually have positive sentiment and/or do not require responses from drivers.
Uber’s research could be an important stepping stone in the ongoing development of AI, ensuring it best supports human needs.
Uber is in talks to sell its air taxi business, Uber Elevate, to Joby Aviation.
While Uber is best known for its ride sharing business, the company has also been working toward deploying an air taxi service. Most recently, at CES 2020 in January, Hyundai and Uber announced a partnership to help make aerial ride sharing a reality.
It now appears that Uber wants out, as it is in talks to sell its Uber Elevate division, according to Axios. The talks are in the advanced stages, and have been confirmed by multiple Axios sources. Joby was already an Elevate partner, making it an ideal option to buy the division.
It remains to be seen how a possible sale could impact other partnerships, such as with Hyundai.
“The Uber Eats business continues to grow at unprecedented rates,” says Uber CEO Dara Khosrowshahi. “Revenue has almost tripled year on year. That business continues to accelerate. It looks like the Eats business is sticky. I wouldn’t count on the growth rates we are having now post-pandemic. However, I do think that you are going to have big growth rates off of a much larger base as a result of everything that has happened.”
Uber CEO Dara Khosrowshahi says that Uber Eats is growing at unprecedented rates during the pandemic and he expects the business to do well post-pandemic as well:
Uber Eats Growing At Unprecedented Rate
On the Uber Eats side, it is an entirely different story where the business continues to grow at unprecedented rates. Revenue has almost tripled year on year. That business continues to accelerate. When we look at Eats we are seeing some great trends. The monthly actives on Eats are up 70% on a year on year basis. The trips are up 110% on a year on year basis. New orders, orders per eater, or basket sizes, all of these trends are up double-digit.
We’ve taken a look at Eats’ performance in markets that are opening up such as New York City and we haven’t seen any kind of performance degradation in Eats. What that suggests to us is that there is a whole new class of consumer that’s experiencing the delight of being able to pick anything and have it delivered within 30 minutes and eat what you want how you want it. It looks like the Eats business is sticky. I wouldn’t count on the growth rates we are having now post-pandemic. However, I do think that you are going to have big growth rates off of a much larger base as a result of everything that has happened.
As Cities Open Up Uber Opens Up
It really is impossible to tell when the mobility business can come back. It depends entirely on the health situation on the ground. With markets that are opening up faster because of the health situation or the society, things are coming back. For example, we looked in New York City where the counts have been down relative to the rest of the country and in just October our volumes were 63% of pre-pandemic levels. This is materially higher than they were in the rest of the nation.
You have week-day use cases of the service outside of commute that is now at pre-pandemic levels or higher. As cities open up Uber opens up as well. We actually think that we can be a beneficiary of certain trends that we’re seeing.
We have invested in safety such as digital mask verification. We also have the No Mask No Rides advertising campaigns. People are feeling safer using Uber. Our reliability and predictability are absolutely unrivaled. While we look at share and we always want to make sure that we are competitive really what we focus on is the reliability of the service and safety of our drivers and hopefully coming back as the health situation improves.
Vaccine Could Radically Improve Bookings
There is a pretty consistent improvement in the mobility business as you go month to month to month. This is one of the benefits of having a truly global business. Within that steady improvement, there are all sorts of ups and downs. Hong Kong has had some openings and closings. Obviously, Europe is now going through another shutdown. US case counts are moving up. The individual curves are not smooth. But when you look at our global portfolio it smooths out.
We are seeing a month to month improvement. For example, if you look at our last quarter overall gross bookings were down 50%. In September, the last month of the quarter, they were down only 44%. You just see this kind of consistent improvement. We think that the consistent improvement will continue into next year. We think a vaccine could radically improve the slope of that improvement.
Uber CEO Dara Khosrowshahi Says ‘Eats’ Growing At Unprecedented Rate
“What we’re expecting is that other states might have otherwise been teed up to try to replicate AB5,” says Lyft’s Chief Policy Officer Anthony Foxx. “What we want to do is engage in discussions with leaders of states who maybe had considered that and to try to talk about a different model, a different way to pursue what we all want. We want to make sure that the drivers are well taken care of, not only when they’re driving but before and after. Also, we want to make sure there’s clarity and certainty in this industry so that it’s not living under a cloud.”
California Assembly Bill 5 (AB5), was overturned by the people in regards to ridesharing with the passage of Proposition 22 Tuesday. AB5 was passed by the Democrat-controlled state legislature and signed by California Governor Gavin Newsom in September 2019 as a favor to both the taxi industry and unions who heavily finance Democrat campaigns. AB5 required companies that hire independent contractors to reclassify them as employees. The bill would have made it financially impossible according to Uber and Lyft for them to operate in California. Unfortunately, Proposition 22 did not change AB5’s ban on independent contractors in other industries.
Lyft’s Chief Policy Officer Anthony Foxx Hopes To Finally End ‘Living Under a Cloud’
“This was massive in terms of almost an existential business risk to these models in terms of the gig economy,” says Dan Ives of Wedbush Securities. “It could have been a $500 million incremental expense to Uber a $150 million for Lyft. In my opinion, they’re really popping the champagne today because this was really a best-case outcome. It was a dark cloud over the gig economy in these stocks and I think worth potentially 15 to 20 percent to ultimately where I see the valuations.”
“What was really the crux of the issue is the worry of the street that this was going to be a pandora’s box situation, a ripple effect across cities and states,” added Ives. “The fact that the voters in California approved this was really a seminal moment. From the beginning, really the last year and a half, it’s been a head-scratcher in terms of what this could have done not just to the gig economy. Of the hundreds of drivers that we’ve talked to, 95 percent of them were against the AB5. This is definitely a sigh of relief early this morning for investors as well as for the drivers themselves.”
Dan Ives: This was an existential business risk to these models in terms of the gig economy.
California’s Proposition 22 is poised to pass, securing the current business model for gig economy companies.
California has tried to reclassify gig economy companies, such as Uber, Lyft and Doordash. The state previously passed legislation requiring the companies to classify their workers as employees, rather than independent contracts. Changing how their employees are classified would have a profound impact on the companies’ and their bottom line, as they would have be required to withhold taxes and provide benefits.
The companies tried fighting the legislation in court, but were unsuccessful. This left Proposition 22 as their best chance to continue operating in the state under their current business model.
The ballot, which had the most expensive campaign of any ballot measure in California history, is poised to pass by a comfortable margin. The fight over gig workers has been closely watched across the country, and will likely help set a precedent for how these companies will continue to operate.
Uber and Lyft have been dealt a major blow, as an appellate court has ruled the injunction against them was appropriate.
Uber and Lyft have been locked in a battle with California over the status of their drivers. California is trying to force the two companies, and other similar gig economy businesses, to treat their workers as employees, rather than independent contractors. This would provide them with benefits which, in turn, would significantly raise the cost of doing business.
In August a judge issued an injunction against the two companies, prohibiting them from operating until they had complied with the new regulation. The companies used the 10-day window they were granted to appeal, but the First Appellate District Court in San Francisco has ruled the injunction was appropriate.
“Not only is this a victory for the tens of thousands of Uber and Lyft drivers working to put a roof over their heads and food on the table, this ruling is about fairness, making it clear that these companies must stop shifting their costs onto the taxpayers while their CEO’s profit,” said Mike Feuer, Los Angeles City Attorney, according to Business Insider.
This makes the Proposition 22 ballot the best hope for the companies to continue doing business as they have. It’s a safe bet that should Proposition 22 fail, other states may look to follow California’s example.
Hyundai is working together with engineering firm Autodesk to design and create “Elevate,” the first Ultimate Mobility Vehicle (UMV).
The UMV was first shown last year at CES, and represents Hyundai’s ongoing efforts to innovate beyond basic car designs. The company is working with Uber to create aerial ridesharing vehicles and is increasing its investment in electric vehicles.
The Elevate platform is designed to combine automobile and robotics technology to create a vehicle that can go where no traditional vehicle can. The Elevate can drive on standard roads, or elevate itself on robotic arms for walking and climbing.
Elevate Mammalian Mode
Elevate is aimed at addressing a wide array of situations where traditional vehicles fall short, such as search and rescue, exploration, transport on uneven ground and transportation for mobility impaired individuals.
Elevate Exploration
“When a tsunami or earthquake hits, current rescue vehicles can only deliver first responders to the edge of the debris field. They have to go the rest of the way by foot. Elevate can drive to the scene and climb right over flood debris or crumbled concrete,” said John Suh, Hyundai vice president and head of Hyundai CRADLE. “This technology goes well beyond emergency situations – people living with disabilities worldwide that don’t have access to an ADA ramp could hail an autonomous Hyundai Elevate that could walk up to their front door, level itself, and allow their wheelchair to roll right in – the possibilities are limitless.”
Elevate Mobility Impaired Transport
Hyundai created New Horizons Studio in Silicon Valley to develop the UMV, and has partnered with Autodesk to make the concept a reality.
“More than 10 years ago, we identified the pain points, rework required and loss of valuable information when projects move from one phase to the next and the associated files don’t play nicely in the heterogenous environments organizations so often use,” says Srinath Jonnalagadda, vice president of design and manufacturing at Autodesk. “Creating a design and engineering platform that helps remove those hurdles, while also putting advanced capabilities such as generative design tools at the fingertips of designers, has been our North Star for a decade. The Elevate project is a showcase of how leaders like Hyundai can now enjoy the fruits of that vision.”
While it may look like something straight out of science fiction, it’s unique abilities will likely make it a hit with its target market.
If there was a time to lean into delivery, this is the time. We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.
Uber CEO Dara Khosrowshahi discusses how Uber Eats is going to ‘essentially power world commerce’ in a Zoom call with the Wall Street Journal:
If there was a time to lean into delivery, this is the time,” We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.
The food delivery business is profitable in certain countries. For example, two of our top five international markets are profitable today and were profitable last quarter. The profitability really depends on how hard we are leaning in toward expanding supply and acquiring customers. The perspective that we have on this business is that even though it’s growing it’s actually very early in its development.
For example, Japan is a huge market potential for us and one of our leading growth markets. Less than ten percent of restaurants in Japan are signed up to use Uber Eats as a delivery service. When you have a situation where your penetration is ten percent of the ultimate market size you lean in as a company.
We are fortunate in that we’ve got very strong balance sheets, over $7 billion in cash and available capital. That allows us to lean into certain businesses. If there was a time to lean into delivery, this is the time. We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.
“Our view is that the commercialization of autonomous driving for passenger vehicles will probably take a bit longer than people would think,” says Richard Zhang, CFO of Full Truck Alliance. “We think the commercialization of autonomous driving for trucks will probably take place a lot sooner than it will take place in the passenger car vehicle sector.”
Full Truck Alliance is a multi-billion dollarvalued company that is becoming the Uber of trucks throughout China. The fragmentation of the trucking industry in China between independent truckers and shippers has resulted in an empty load rate of over 40 percent, about four times higher than in the United States. The Full Truck Alliance app and online platform connects shippers to truckers in real-time enabling huge reductions in empty loads.
Richard Zhang, CFO of Full Truck Alliance based in China, discussed the company’s future in an interview on CNBC International TV this morning:
Full Truck Alliance in China is the Uber for Trucks
The problem we’re trying to solve is very simple because there are high inefficiencies between matching with the truck drivers and also matching with the shippers. The empty load rate in the US is only ten percent while the empty load rate in China is 40 percent. The empty load rate is very similar to the vacancy rate in the hotel business. The reason is that the market here is highly fragmented. You have highly fragmented truck drivers and highly fragmented shippers, lots of SMEs.
Before we came into existence the matching between the truck drivers and shippers were taking place across a thousand offline marketplaces in China. What we have been trying to do is bring that offline marketplace online and use our algorithms in the back office to match automatically the truck drivers and the shippers. We are trying to reduce that empty load rate to well below 40 percent.
Monetization Via Membership and Uber-Like Fees
Our monetization strategy for Full Truck Alliance is as a product of a merger between two companies, Truck Alliance and also Yunmanman a little over a year ago. Post-merger we started monetization and the monetization takes place in two ways. Number one is we are charging a membership fee for the shippers and also very similar to Uber or DiDi we’re charging a take rate on the transactions themselves.
We were very close to achieving our 2018 profit objective. We are actually very marginally close to break-even at the current moment and we have no doubt that we’re going be making earnings in 2019.
Autonomous Driving for Trucks Will Happen First
Our view is that the commercialization of autonomous driving for passenger vehicles will probably take a bit longer than people would think. We think the commercialization of autonomous driving for trucks will probably take place a lot sooner than it will take place in the passenger car vehicle sector. Therefore we are deploying a certain amount of resources into that sector in the form of investment.
We have decided to be a strategic investor in an autonomous driving truck company for them to actually develop that technology and for us to actually use. The mandate for the partner is to actually put a fleet on the road in China to start working with our shippers in the next 12 to 24 months. That’s our mandate and so it depends on how successful they’re going to be at executing our strategy.
