Uber Technologies Inc. is reportedly considering spinning off its Uber Freight business in a sale or as a publicly traded firm.

Bloomberg, referencing people familiar with the matter today, said the spin-off is being considered as Uber is looking to streamline its focus on ride-hailing and food delivery. A decision to spin off Uber Freight is said to be not imminent and the company’s plan could change.

The same sources say an initial public offering is a more likely outcome and if Uber decides to go with an IPO, it may not happen until next year and will depend on market conditions. Uber has declined to comment on the report.

Founded in 2017, Uber Freight is a logistics and supply chain management firm that connects truck drivers to shipping companies, quite literally Uber for trucks in all but name, with a range of additional services.

The company was partially spun off in October 2020 when it raised $300 million on a $3.5 billion valuation from Greenbriar Equity Group L.P. According to Crunchbase, Uber Freight raised an additional $550 million from D1 Capital Partners, GCM Grosvenor Inc. and the Abu Dhabi Growth Fund LLC in November 2021.

Uber last reported earnings on Feb. 8, with the freight business generating revenue of $1.5 billion in the quarter ending Dec. 31, up 43% year-over-year, But the headline figure does not tell the whole story. In its fourth-quarter earnings call, Uber’s Chief Financial Officer Nelson Chai warned that Uber Freight would struggle going forward from a cyclical downturn in the business.

“We do expect that you’ll see us getting some traction there, but the overwhelming cycle that’s going on right now more broadly on the freight industry is going to continue to impact our business,” Chai said in the call. “And so, that business will continue to lag likely versus where we would have hoped.”

Uber Freight also announced it was laying off 3% of its workforce, or 150 employees, in January, citing headwinds in the logistics market. Like many other companies, Uber also noted that the freight business had accelerated hiring in 2022, expecting a different economic reality.

A downturn warning ahead of a possible sale or IPO is not ideal when trying to maximize shareholder return. With Uber said to be possibly waiting until next year to float the company, it may not be considering market conditions alone and could be hoping that the overall freight market turns around over the next year as well.

Photo: Uber