The long reach of Silicon Valley has permeated more and more sectors of American and global business. Now, with the launch of Convoy, the tech world is looking to make waves in the trucking industry, too.
Hoping to do what Uber did for personal transportation, Convoy boasts the backing of some of the tech industry’s biggest names — Amazon’s Jeff Bezos, Expedia’s Dara Khosrowshahi, Salesforce.com’s Marc Benioff, and eBay’s Pierre Omidyar, to name just a few. Even former Starbucks president Howard Behar has joined the impressive list of those backing the Seattle startup.
Convoy is a service that connects shippers and carriers. A company will use Convoy to book a shipment, and a shipper will be notified, springing into action to pick up and deliver the designated cargo. Like Uber or Lyft, this can all be done via a free mobile app. Convoy takes a percentage of the payment made by the shipper, and the rest goes to the carrier.
If this sounds familiar, there’s good reason. There are a number of businesses aiming to offer services similar to those of Convoy. Cargomatic, for example, has already made efforts to bring the sharing economy principles to the trucking industry. The Los Angeles-based company, which currently operates out of California and New York, has plans to expand even further. Cargomatic has received $12 million in funding to date, after two years in the business. Convoy, on the other hand, has raised $2.5 million, though it’s been around for a few months.
Convoy is the baby of Seattle’s Dan Lewis, who has a background in both tech and delivery, having driven a truck for his family’s office supply company and worked for Microsoft, Google, and Amazon. Though he’s definitely more tech than truck, Lewis, along with his financiers, hopes to capitalize on the needs of an industry that brought in over $700 billion last year and is an integral part of American commerce.
Services like Convoy and Cargomatic are trying to offer an alternative to conventional brokers, who often take 20 to 45 percent of shipping fees. Lewis says that Convoy will make the process of finding a shipper easier and quicker for businesses, taking minutes as opposed to hours.
Lewis sees the pricing of transactions as one of Convoy’s main issues, one that the company is hoping to address through its proprietary algorithm, he told USA Today. Variables on that front include the size of the cargo, the location of the shipper, and the speed at which a shipment needs to be delivered.
New mobile apps like Convoy could have a major impact on the way small fleets find work, especially if truckers are willing to adopt the use of a smartphones as a part of their business model. uShip, another dog in the mobile trucking fight, conducted its own survey among 6,000 owner-operators that seemed to suggest fleet owners are already incorporating mobile technology. The uShip survey reported that 37 percent of respondents use their phone to book loads.
How exactly Convoy will fair in the coming years remains to be seen, but Lewis certainly has a lot of expertise in his corner to help him shake things up in the trucking industry.