According to a recent blog by Uber Freight, the online broker has opened up online bidding allowing carriers to place bids on select loads within the the mobile application.
According to the post, this new “feature will give carriers and their drivers even more flexibility and control over their businesses by allowing carriers to submit bids and receive feedback on select loads directly in the app. Carriers are notified if their bid was won or lost, and winning bidders will have the load temporarily reserved for them to book at the winning price. All loads available for bidding will still have an upfront price allowing carriers to book in seconds if that’s preferred. As a complement to our dynamic pricing engine, and by automating and streamlining the traditional bidding process, Uber Freight’s in-app bidding aims to improve functionality for the entire freight marketplace.”
Uber Freight’s existing dynamic pricing engine analyzes market conditions in real time to price loads quickly and transparently, according to the blog post. Uber adds that the “complexity of the freight industry means that combining these algorithms with bidding information from carriers on the front lines is important.”
Uber hopes that with the addition of in-app load bidding they will be able to better balance supply and demand. From a practical point of view, it will likely encourage lower bids as Uber could start with a very low book it now price, prompting carriers to bid against each other while trying to achieve a higher rate, which is often lower than the market rate. This has been one of the main issues with other bidding freight applications. When carriers are forced to bid, they actively work against each other booking freight at a lower rate then the previous carrier.
While this process may help the shipper obtain a lower shipping price, it does little to help level market rates for drivers.