Question of the day
Monday, Sep 9, 2019 - Posted by Rich Miller
* Uber Freight…
In three years since launch, Uber Freight has grown to a team of hundreds, with offices in San Francisco, Chicago, and Amsterdam. Now, Uber Freight will be solidifying its investment in Chicago with a new Freight headquarters at The Old Main Post Office, in Chicago’s historic downtown.
Globally, freight is a 3.8 trillion dollar industry ripe for change, and Uber Freight is leading the way towards a more efficient and collaborative freight future. We’ve built cutting-edge technology for both sides of the freight marketplace, unlocking opportunity for shippers, carriers, and their drivers so that they can focus on improving their bottom lines, growing their businesses, and keeping their eyes on the road ahead. We’ve pushed the entire industry towards transparency with features like facility ratings and real-time pricing. And this year, we brought these same values and logistics solutions abroad, expanding operations into Europe.
* Sun-Times…
Promising a more than $200 million annual investment in Chicago, the CEO of Uber Technologies said Monday the city will be central to the company’s bold plans to expand in freight.
Dara Khosrowshahi also said despite Uber’s billion-dollar losses, its balance sheet remains strong and the company will have a high profile in Chicago for years.
“While we are investing aggressively in growth and this Chicago investment is part of that, we are very, very confident that the balance sheet that we have, that the cash we have on our books, and our business, are going to be around for a long time. So I have no doubts in our ability to be here for the next five, 10 or the next 20 years,” he said at a news conference in the lobby of the Old Main Post Office, Uber Freight’s future home. […]
[Several politicians] were there to cheer Uber’s vow to hire 2,000 new employees here over the next three years. By early next year, it expects to occupy 463,000 square feet, covering two floors in the vast Old Main Post Office at 433 W. Van Buren St. Its lease covers 10 years.
* Reuters…
Uber’s full-year revenue for 2018 was $11.3 billion, up 43 percent from the prior year. Its losses before taxes, depreciation and other expenses were $1.8 billion, an improvement over the $2.2 billion loss posted in 2017.
* From the governor…
* The Question: Your thoughts on this?
- City Zen - Monday, Sep 9, 19 @ 3:32 pm:
Ask for rent in advance.
- Henry Francis - Monday, Sep 9, 19 @ 3:33 pm:
This is a good investment. Any incentives from the State?
There are already a lot of logistics companies in town. I wonder if this is going to be a net gain for the city, or if Uber is going to take away their customers.
- OutOfState - Monday, Sep 9, 19 @ 3:38 pm:
1. Uber is in the business of aggressively investing in new business areas in the name of “growth” and acquiring market share, all at monumental losses.
2. Freight is increasingly at risk of being automated, which would be good for profits and possibly corporate jobs, but not so much for drivers. If any significant portion of this 2,000 new employees is driver-based, let’s not get too excited for long term prospects.
3. Additional income is much needed, and leasing unused real estate is a way to increase asset efficiency.
The Verdict: Cautiously optimistic. We’ll see how Uber transitions into profitability, which it needs to do soon.
- twowaystreet - Monday, Sep 9, 19 @ 3:38 pm:
Second the rent comment. Also, would be curious to know if/what incentives were given by the state.
- MG85 - Monday, Sep 9, 19 @ 3:48 pm:
Great. Another anti-worker billionaire company not paying any taxes.
- don the legend - Monday, Sep 9, 19 @ 3:51 pm:
Is this one of Rauner’s companies waiting in the wings if we just could restructure a few things?
Inquiring minds want to know.
- Odysseus - Monday, Sep 9, 19 @ 3:52 pm:
Uber will not survive as a company, they are unwilling to price their services high enough to generate a profit.
To the extent that Illinois is depending on these jobs, that does not bode well at all for the future.
- amalia - Monday, Sep 9, 19 @ 3:53 pm:
can we deliver freight in passenger cars? cause I hate vans, panel trucks, big trucks…..
- OneLittleCherry - Monday, Sep 9, 19 @ 3:54 pm:
So I wonder if DCEO Acting Dir. Guthrie will go back to Uber now? Mission accomplished right?
- A State Employee Guy - Monday, Sep 9, 19 @ 3:55 pm:
Not sure I’d brag about bringing in a company that misclassifies its employees as independent contractors and still can’t turn a profit. But then again, I’m not a businessman like JB.
- Moe Berg - Monday, Sep 9, 19 @ 4:02 pm:
Uber (and Lyft for that matter) is keeping the plate spinning for Wall St. and hoping that automated cars are available in the market sooner rather than later and that somehow it will have an advantage that other companies developing self-driving technology do not.
Ride-hailing is not profitable and relies upon the exploitation of drivers (who are either desperate or haven’t done the math to know they are making sub-minimum wage after expenses).
Eventually the tide will roll out and we’ll see indeed that Uber is wearing only its birthday suit.
- Annonin' - Monday, Sep 9, 19 @ 4:09 pm:
Seems like a solid development. The knockers must be waiting for the Coal Comeback or Mooch McSweeney’s rise to fiscally responsible US Senate.
Somethin’ for nothin’
- Cornish - Monday, Sep 9, 19 @ 4:22 pm:
The jobs are not truck driving jobs. They are building out sales and engineering staff for Uber Freight. Good news for Chicago.
- Cornish - Monday, Sep 9, 19 @ 4:22 pm:
And no government subsidy involved, which is very good.
- Cornish - Monday, Sep 9, 19 @ 4:24 pm:
There is no “mis” classification of jobs. The drivers are independent contractors.
- Juvenal - Monday, Sep 9, 19 @ 4:25 pm:
“I have no doubts in our ability to be here for the next 5, 10 or 20 years.” LOLOL if you had no doubts, you would not have led with 5.
The companion piece with Lightfoot backtracking on the congestion tax re: Uber was awesomeness.
- Cornish - Monday, Sep 9, 19 @ 4:28 pm:
MG85, no one pays federal corporate income taxes on losses. I don’t know why Uber would be different.
- Grandson of Man - Monday, Sep 9, 19 @ 4:35 pm:
Pritzker is a proven job creator, unlike the former governor, and highly touted in tech start-ups. It’s more proof that many corporations love Chicago and Illinois, are investing in us and don’t stay away, the way right wing scare mongers say. It’s more proof that we don’t need RTWFL and austerity.
- Cornish - Monday, Sep 9, 19 @ 4:38 pm:
Pritzker had nothing to do with this. Where did you get your information Grandson of Man?
- OneMan - Monday, Sep 9, 19 @ 4:40 pm:
Years ago during the .com boom I interviwed with a compnay on the northside that did freight consolidation. The combination of less than full truck loads between locations seemed like a logical place for technology.
Kind of curious what they are doing in the logistics space.
- Three Dimensional Checkers - Monday, Sep 9, 19 @ 4:40 pm:
=== It’s more proof that we don’t need RTWFL and austerity. ===
Lol.
- twowaystreet - Monday, Sep 9, 19 @ 4:43 pm:
==Kind of curious what they are doing in the logistics space.==
My understanding from my friends in the logistics space is that uber freight is logistics, not truck driving.
- Powdered Whig - Monday, Sep 9, 19 @ 4:47 pm:
=== Great. Another anti-worker billionaire company not paying any taxes. ===
Last I looked at the tax code, you only tax income. Since the company has not yet turned a profit, what kind of taxes do you think this “billionaire company” be paying?
- revvedup - Monday, Sep 9, 19 @ 5:09 pm:
Uber may be running at a loss, but remember, so did Amazon for years…
Aiming at the business to business freight market, and related B2B logistics is likely Uber Freight’s goal, not consumer delivery. Although they could use Uber drivers as delivery people; some local taxi companies already do that. But going ground up against existing players (UPS, FedEx, Amazon, etc. won’t be easy, and 10 year leases are made to be broken if they go broke trying.
- @misterjayem - Monday, Sep 9, 19 @ 6:42 pm:
“Since the company has not yet turned a profit, what kind of taxes do you think this ‘billionaire company’ be paying?”
The employer portion of its drivers’ payroll taxes.
– MrJM
- Cornish - Monday, Sep 9, 19 @ 7:33 pm:
Does Uber not pay payroll taxes?
- Streamwood Retiree - Monday, Sep 9, 19 @ 7:53 pm:
==Does Uber not pay payroll taxes? ==
Not if they classify their employees as independent contractors.
- Chicago 20 - Monday, Sep 9, 19 @ 8:11 pm:
It can’t be too long before Uber Healthcare starts.
- Powdered Whig - Tuesday, Sep 10, 19 @ 7:46 am:
=== The employer portion of its drivers’ payroll taxes. ===
Why would they pay the employer portion of driver’s payroll taxes if they are not employees?
And if you are still arguing that drivers are in fact employees, you must of missed the decision of the NLRB that states that the drivers are not employees.
- @misterjayem - Tuesday, Sep 10, 19 @ 8:03 am:
“Why would Uber stop screwing their workers if they can get away with it?”
Well, I guess ya got me — but you’ve certainly told on yourself.
– MrJM
- Cornish - Tuesday, Sep 10, 19 @ 8:49 am:
Right, so Uber pays it’s employee payroll taxes not it’s independent contractors though. Nothing unique about that.
- OneLittleCherry - Tuesday, Sep 10, 19 @ 8:55 am:
“Pritzker had nothing to do with this.”
Incorrect, why do you think Erin Guthrie was chosen for the head of DCEO?
And look at who Guthrie hired.
- Grandson of Man - Tuesday, Sep 10, 19 @ 8:58 am:
“Pritzker had nothing to do with this.”
Never said he did. Just responded to his tweets in this post. Pritzker was/is a highly-regarded venture capitalist and job creator.
- Juvenal - Tuesday, Sep 10, 19 @ 9:01 am:
@Grandson -
This is not a Lightfoot accomplishment. This deal was made under Rahm. That Lightfoot was standing up at a job announcement for a mayor she blasted in a neighborhood she’s railed against for a company she’s dragged…part of me wonders if Rahm planned it that way.
What is interesting is that Lightfoot scheduled the announcement for when the governor was supposed to be in Japan. Clearly having Pritzker there was not a priority, was he even invited, or is this more pettiness from the 5th floor?
- DuPage - Tuesday, Sep 10, 19 @ 9:18 am:
“Since the company has not yet turned a profit, what kind of taxes do you think this ‘billionaire company’ be paying?”
The employer portion of its drivers’ payroll taxes.
– MrJM
You hit the nail on the head, MrJM. Additionally, other employer taxes such as workers comp and unemployment taxes are evaded as well. Not to mention if one of these drivers is in an accident that injures or kills someone, the company is shielded from liability. They just tell the driver “you are on your own, and by the way, you don’t work for us anymore”.