Uber Technologies Inc is exploring whether to spin off its Uber Freight logistics arm in a sale or as a separate publicly traded company to streamline its focus on ride hailing and food delivery, people familiar with the matter said.
The company is discussing its options with potential advisers, the people said.
A decision by Uber on the freight unit is not imminent and the company’s plans could change, the people added.
Photo: AFP
An initial public offering (IPO) is the more likely outcome, one of the people said.
If the company decides to launch an IPO, it might not happen until next year and would depend on market conditions, another person said.
An Uber spokesman declined to comment on what he called rumors and speculation.
Spinning out the freight division would allow Uber chief executive officer Dara Kosrowshahi to focus on the ride-hailing and food-delivery units, which are growing. The freight unit runs by itself and has struggled during a broader downturn in trucking.
Uber’s US$8.6 billion in revenue for the fourth quarter of last year beat analyst estimates overall, as demand for rides and food delivery exceeded expectations, and the two units fared well despite inflation worries.
Uber Freight faces a more challenging outlook than other divisions of the company. The division pairs trucking companies with those seeking to transport loads and operates as an independent unit. In January, Uber Freight said it would cut 3 percent of its workforce.
On the company’s fourth-quarter earnings call, chief financial officer Nelson Chai said that Uber Freight would struggle going forward because of a cyclical downturn in the business.
“We do expect that you’ll see us getting some traction there, but the overwhelming cycle that’s going on right now more broadly on the freight industry is going to continue to impact our business,” Chai said.
“That business will continue to lag likely versus where we would have hoped,” he added.
Uber launched the freight division in 2017, pairing trucking companies with those seeking to transport loads in a similar model to the company’s ride-hailing business.
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