https://convoy.com/
Bezos reportedly has put $400 million into it. Uber is starting their own for trucking. Do you think this will shake up local/regional trucking? Can the railroads find advantage in it?
The website suggests that this outfit is an agency for shippers to locate and hire owner-operators who need loads. Not really a new concept.
It is a way for Shippers to cut out the brokers that overpromise on the number of trucks they can provide. CH Robinson is one of the largest brokers in the Industry and they routinely say they can provide 20% more trucks than they actually provide. Why does no one like CH Robinson if your a carrier. We in the industry call them Cheap and Heavy for a reason. They take so much off the top of the true rate paid most of the time your lucky to cover your costs. My boss uses them as a LAST and I mean LAST resort to get a truck back for us. He actually got a contract from a shipper heading back this way for us from a place that only used CH Robinson. Why we had trucks in the area all the time going to where they had product our rate we quoted was better than what CH was charging them and oh yeah better service. That rate CH was charging was 40% more than what we got paid from them. He under cut them inbetween what they paid us and their figure for the lane we needed and got that lane for us.
Convoy and Uber are essentially brokers as well.. albeit with better shinier technology. I guess when uber starts making money I'll start to pay attention.. Personally I'm more concerned about nimble competitors who can operate profitably. Not too concerned about "innovators" who burn through their investors' cash at light speed and post losses year after year. So turning anyone and everyone who has a car and no more than 9 points on their license into a cabbie is groundbreaking innovation... ok I guess.
Seems as if Uber has rub afoul of the State of New Jersey....The evening tonight [11/14/2019 carried a story re: Uber had in a Court Case was found to have actually been employing their drivers as employees/contractors, and thus had voided their status as independent contractors.
Apparently, their company(Uber's) rules were such, that the court said they had removed the drivers status as independent contractors, and they were in-fact employees of Uber.
The nasty part was that the court had said Uber was now responsible for all the State Taxes (employment as well as the State's employment benefits). The point of all that was that Uber owed the State of New Jersey some $690 MILLION BUCKS.
Sort of smacks of what happened, some years back; in the trucking business with several carriers that used Owner-Operators as contractors. A series of Court cases back then, made the point that in order to qualify as independent contractors; trucking companies had to make serious changes in the way rules were made and enforced on those Contractors.
samfp1943A series of Court cases back then, made the point that in order to qualify as independent contractors; trucking companies had to make serious changes in the way rules were made and enforced on those Contractors.
Two fun little things: (1) the IRS has developed fairly strict rules about when someone is an 'independent contractor' vs. employee, and (2) the IRS and other entities are constantly revising the rules based on what companies do to 'evade taxes' or otherwise circumvent their efforts. We make a point in Memphis of having a seminar once a year for small-business owners that recapitulates the laws that apply, and emphasizes any changes since the previous year. Over the years since I first started with this, I have seen several.
One of the more important 'tests' for independent contractors is "scheduling": independent contractors do their own, coordinating with 'clients' on their own as needed, and the person or firm that contracted them cannot dictate otherwise. (We got around this as a service business by offering scheduling 'programming' for them as a "service", with no discipline or other issues other than at-will decision not to use them as contractors in the future if they failed to show as expected. But it has to be arms'-length, and it cannot be mandatorily enforced ... which are things difficult for a company like Uber to achieve without sufficiently high QoS.
It is highly likely that with the great rise in popularity of 'jitney' services like Uber, taxing authorities will find ways to make income taxable, and 'quality' regulatable -- they will have support from the taxi industry, for example. In fact I suspect there are some specific rideshare-regulation bills in discussion, always of course justified in the "think of the children!" manner based on horror stories of Uber drivers ravishing hapless passengers and whatnot, which will make Uber more responsible for vetting, supervising, and training its drivers and surprise! making them "employees" in the process.
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