A to B: Uber is mulling its options for Freight, its lesser-known division

3/9/23 7:00PM

Uber is reportedly considering spinning off its freight division, either through a sale or as a separate public company.

‍Delivering revenue

‍The freight business was started in 2017 as part of the “Uber Everything” initiative. As the name suggests, that was Uber’s goal to find ways of using its technology — which was already good at brokering transport for people to go from A to B — to transport anything.

‍Uber Eats has become a particularly important part of Uber’s business and helped the company survive the pandemic when ride-hailing dried up, but Uber Freight, which connects carriers with shipments in a similar way to how the rides business works, has also grown quickly. Thanks in part to the acquisition of shipping software company Transplace in 2021, Uber’s logistics arm has grown into a $1.5bn-per-quarter business, contributing 18% of the company’s overall sales.

‍Uber Freight is already run separately from the core Uber business, and a spin-off could help Uber concentrate on mobility and Eats. Plus, as the company scales its advertising offering, it’s easy to imagine pop-ups for food or a ride (think adverts for food on your way home, or ads for specific brands on your way to the airport, mall or cinema). It’s harder to see how adverts would boost margins in the competitive freight business.

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.