As freight rates continue to float downward, freight tech companies appear to also be feeling the financial crunch. It could just be a coincidence or it could be a telling sign that some of these VC backed companies need to be profitable. With layoffs and with some of the major players in the industry with potentially thousands of jobs at risk, what is the future looking like for these innovators and advancements in the freight and transportation tech spaces?
Reported earlier this month, NEXT Trucking who produce a mobile application which matches port drayage owner operators with containers to haul who this month laid off 20% of their staff citicing restructuring and trade wars as potential reasons behind these layoffs.
Trucker Path, what was once one of the most popular mobile applications for truckers, helping drivers locate open scale houses, restaurants, truckstops, and many more tools for drivers reportedly laid off up to 50% of its workforce across all departments in the United States and Russia. According to user reviews online, it appears the company is in the middle of making a last ditch effort at monetizing the popular application by converting many of what were free trade tools for drivers to paid access and the apparent increase of pop up advertising in the app. Driver’s resist these changes and in reviews make mention of how good the application used to be.
Other transportation tech startups are also feeling the pinch. Uber announced last year that it laid 1,000 last year accross its business and have recently decided to sublease a major portion of what is to become the headquarters for Uber Freight in Chicago, according to the Chicago Tribune. They previously said they had ambitions to hire as many as 2,000 employees to work within their freight division to occupy this space. Another ridesharing giant Lyft announced this month it was laying off 90 workers, roughly 1.6% of its workforce across several departments according to reports.
Some of these companies might be feeling pressure from their Venture Capital investors, there is little to be done outside of restructuring, reorganization and waiting out the effects of the ever volatile freight market.