Uber could reportedly spin off its logistics business to focus more on delivery and ride-hailing.
This move could mean either the sale of Uber Freight or turning the business into a separate publicly-traded company, Bloomberg News reported Wednesday (Mar. 8), citing sources familiar with the matter.
The sources tell Bloomberg Uber is discussing both options with advisors, and that plans are still in the early stages. One of the sources said an initial public offering (IPO) for Uber Freight is the more likely path, though another source said that may not happen until next year.
PYMNTS has contacted Uber for comment but has not yet received a reply.
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Launched in 2017, Uber Freight connects shippers and carriers. In 2021, the company purchased logistics firm Transplace for $2.2 billion.
In the company’s most recent earnings report, revenues for the freight business were 43% higher than the previous year, though — as PYMNTS reported — that was a marked slowdown after a series of quarters in which the division enjoyed triple-digital percentage point growth.
Management had warned on the company’s earnings call last month that this slowdown was reflective of a cyclical downturn in the sector.
“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,” Nelson Chai, Uber’s chief financial officer, said at the time.
Meanwhile, Uber’s core businesses — ride-hailing and food delivery — saw increased bookings during the same quarter.
“The pandemic’s impact on our mobility business is now well and truly behind us,” CEO Dara Khosrowshahi said during the earnings call in February.
The company also saw a boost from Uber One, its cross-platform membership program, whose base nearly doubled to approximately 12 million members.
“We are pushing Uber One,” said Khosrowshahi, adding that “you’ll see it on our delivery services. You’ll see it on our mobility services. And we are quite actively continuing to innovate in terms of the benefits that we offer … it creates great stickiness and member retention.”
