One of my favorite books is ‘A Bridge Too Far’ by Cornelius Ryan. The book recounts one of the largest military operations in WW ll code-named Operation Market Garden. The offensive called for three Allied airborne divisions (the “Market” part of the operation) to drop by parachute and glider into the Netherlands, seizing key territory and bridges so that ground forces (the “Garden”) could cross the Rhine river.
The primary objective of Operation Market Garden was to capture eight bridges. A key officer involved in the planning of the mission, Lt. General Frederick Browning stated, “I think we might be going a bridge too far.” He was right. The phrase ‘A bridge too far’ has been used to describe situations where the military, companies, or individuals have overreached.
I believe Uber made an error in believing their business model could be applied to logistics and transportation. Uber Freight certainly has one of the largest networks of digitally-enabled carriers and their technology can be described as industry-leading. However, Uber Freight has not achieved the results desired by the company nor has Uber Freight been as disruptive to the transportation industry as Uber has been to the taxi industry – far from it.
Uber is considering an IPO for Uber Freight or a sale. Which option is best? That’s easy – divest Uber Freight ASAP.
Uber MUST focus on its ride-hailing business and food delivery units, which are growing. Uber Freight has and will continue to be negatively impacted by the global turndown in the economy. In addition, Uber Freight generates so little revenue and controls such a small portion of the freight forwarding industry, the juice isn’t worth the squeeze. Uber Freight should be acquired by a company that will benefit from the executive team, technology and business model – my vote is that C.H. Robinson or A.P. Moller – Maersk acquire Uber Freight. Maersk would be wise to assess acquiring Flexport.
As for Uber, the best acquisition they can make is to acquire Instacart. Note: If Uber doesn’t acquire Instacart, Shopify, DoorDash or Target more than likely will. The last thing Uber needs is for DoorDash to acquire Instacart.
The Wild Card acquisition that I believe Uber should make is to acquire Domino’s. The biggest problem facing Domino’s is their lack of drivers to meet customer demand. Domino’s would prefer to use their own drivers and avoid using 3rd party delivery companies like Grubhub, DoorDash, or Uber Eats. Based on the latest results from Domino’s, however, I strongly encourage their CEO Russell Weiner, and Uber’s CEO Dara Khosrowshahi, to meet and discuss an acquisition.
Uber must change their approach to food and grocery delivery. Uber must be fully committed to both. Acquiring Instacart and Domino’s would be a strategic masterstroke by Uber.
