An Austin, Texas, company that operates a website connecting people with
professional movers has made quite a move of its own.
UShip Inc. has reached
profitability and topped $125 million worth of transactions during its first
five years of operation. This year, the company doubled its revenue compared
with 2008 and now plans to expand its business in Europe, Canada, and
Australia, CEO Matt Chasen said.
UShip, which was founded in 2003 and launched its website in 2004, reached
profitability during 2008 and has met or exceeded all its projected milestones
from when it was founded. For example, the average shipment brokered through
uShip’s site has reached $700 versus the initial estimate of $70.
Because uShip’s revenue is based on the size of shipments, the difference
has been a welcome underestimation.
“We’ve been kind of blown away by the opportunity,” Chasen said. “We sort of
stumbled upon a larger opportunity than anyone envisioned.”
UShip, which employs 50 workers, doesn’t disclose its annual revenue.
During two financing rounds in 2005 and 2006, the company received $5
million to $10 million from Benchmark
Capital, a California-based venture capital firm. But uShip hasn’t needed
to use all the capital, Chasen said.
Here’s how it works: Transporters and users post their listings on the uShip
website for free. Transporters bid to move a user’s goods, and the user then
selects a transporter.
The transporters ship nearly every type of freight imaginable, including
cars, household goods, horses, boats, pets, and heavy equipment.
UShip generates revenue by taking a tiered-based share of the moving fee.
That share can range from 0.9 percent to 12.9 percent, depending on the price,
Also, users may post reviews of the transporters to generate ratings for
subsequent customers to check.
Norita Taylor, spokeswoman for the Missouri-based Owner-Operator Independent Drivers Association,
said Web-based businesses such as uShip are providing a small segment of the
trucking industry with another option at a time when regular customers are
cutting costs. Transporters and users, however, need to be careful about the
quality of people they’re doing business with, she said.
UShip’s service has managed 900,000 shipments since launching in 2004. At
any given time, $8 million to $10 million worth of shipping jobs are available
to transporters on the website.
In October 2008, metrologist Jerry Eldred needed to move his household goods
and two vehicles from New Hampshire to Austin on a $5,000 budget.
Through uShip, he received five to 10 bids and found a trucker who would
move everything for $4,000 within three days.
Eldred attributed the price and quality of the work to the transporter he
selected by reading the reviews from previous customers. “You’ve got to do your
homework,” he said.
Chasen said uShip’s system automatically flags negative reviews, which could
lead to the suspension of posting privileges on the website. Fewer than 50 of
the 160,000 listed transporters have been suspended, he said. Those have been
mostly for double postings, which are prohibited.
The website recently listed 737 transporters in the Austin area.
Business from eBay, which has generated $30 million in shipments for uShip
transporters, has been a major part of uShip’s revenue, Chasen said.
One potential competitor, Connecticut-based RedRoller Inc., launched last
year after two years of beta testing and a reverse merger. But it subsequently
filed for bankruptcy reorganization and sold its assets to uShip.
UShip board member Bob Kagle, a general partner at Benchmark Capital, said
the company needs to raise its profile to generate more business.
“It’s a very efficient marketplace for these types of transactions,” he
said. “But it’s just not a household name.”
Meanwhile, Chasen said non-U.S. shipments using uShip increased 500 percent
this year compared with 2008. He’s been looking at more specialized versions of
the website, focusing on specific industries and languages. Although such initiatives
would provide the company with growth opportunities, they would also delay the
prospect of an initial public offering, Chasen said.
“We’re far from where we would like to be to even consider that,” he said.
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