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On-demand trucking app Convoy doesn’t want to be the ‘Uber for trucking’ anymore

On-demand trucking app Convoy doesn’t want to be the ‘Uber for trucking’ anymore

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And it’s not just because Uber is doing trucking now

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Image: Convoy

When it launched in 2015, the Seattle-based truck technology company Convoy aptly described itself as the “Uber for trucking.” Like the ride-hail service, Convoy built an app to match trucking companies with shippers that need to move freight. And after all, Uber had showed no interest in the $700 billion trucking industry at that time, so Convoy obviously felt safe in making that claim.

A year and a half later, and things have changed dramatically. Convoy isn’t the only tech startup interested in changing 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 entrant in the field that can more confidently describe itself as the Uber for trucking: Uber. The embattled ride-hail company launched Uber Freight last 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.”

a new entrant can more confidently describe itself as the Uber for trucking: Uber

If all this extra competition from some serious heavy weights in the industry is cause for added anxiety, Convoy isn’t showing it. The scrappy startup announced yesterday that it has raised $62 million in its Series B fundraising, led by the venture capital fund of Silicon Valley-based incubator Y Combinator. New investors in Convoy include Cascade Investment, Bill Gates’ investment fund Mosaic Ventures, 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.

That list of luminaries has helped Convoy CEO Dan Lewis retain his sense of confidence as his space becomes increasingly crowded. “Uber’s definitely in the freight space,” Lewis told The Verge. “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.”

Image: Convoy

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 and retailers that are shipping goods with truck owners and fleets. But Lewis noted that Uber’s new brokerage uses a manual, phone-operating system to connect drivers to manufacturers, while Convoy relies on a completely tech-driven system.

“So I think we’ve taken a slightly different approach in terms of how do you automate the process, how do you automate the pricing, how do you identify the right truck using this technology,” he said. “We’ve done that since day one.”

“It just became a brand people were uncomfortable being affiliated with.”

Lewis allowed that Uber has a “very well-recognized brand with a lot of PR money behind it,” but is still struggling to recover from a string of self-inflicted scandals and major exodus of top executives, including CEO Travis Kalanick. Uber’s woeful year has led to Convoy downplaying 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.”

Uber wasobviously motivated to get into the trucking industry by the lucrative possibilities inherent in self-driving trucks. The company bought the automated truck company Otto last year — a move in hindsight 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 are still embroiled in a bitter lawsuit over the allegations.

Convoy remains uncommitted on the question of autonomous trucks

While Uber stumbles its way toward automating long-haul deliveries, Convoy remains uncommitted on the question of autonomous tractor trailers. “We’re not closed off to any specific solutions,” Lewis said. It’s not a total shock: Convoy is still tiny compared to Uber: $80 million in capital raised vs. Uber’s $69 billion valuation. Buying trucks and retrofitting them with self-driving hardware is expensive. Maintaining a fleet of vehicles is even more expensive. And Lewis isn’t convinced that they’re anywhere close to predictions of fully automated, driverless trucks.

“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 multiyear 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 views Convoy’s role as helping the trucking industry better incorporate automated technologies, such as how to figure out which system to use, which trucks to buy, how to retrofit trucks for self-driving, etc. “As that’s happening, the business Convoy is going to be incorporating that as a capability into our system,” he said, “and it’s going to evolve every year.”