Delayed and downsized by the pandemic, Uber opened its sprawling new office space at the redeveloped Old Post Office, which will serve as the headquarters for its Uber Freight business and Chicago operations.
The San Francisco-based ride-share company cut the ribbon on its ninth-floor office Tuesday, with Uber CEO Dara Khosrowshahi and other top executives touting a new home and expansive future in Chicago.
“Uber Freight is now one of the world’s largest digitally-enabled carrier networks with enormous potential, and there’s no better place to grow this platform than here in Chicago,” Khosrowshahi said.
The Old Post Office will be the global headquarters for Uber Freight, its fast-growing logistics division launched in 2017 to connect truck drivers with shippers. The space will also house sales, legal, marketing and other staff for the Uber Eats and ride-sharing operations in Chicago.
Chicago’s redeveloped Old Post Office, which has attracted a growing list of technology companies, is now the second largest office location for Uber, both in terms of space and staffing, behind its corporate headquarters, the company said.
Uber is the largest tenant in the repurposed building, but initial plans called for it to be even bigger.
In 2019, Uber announced it had signed a 10-year lease for 463,000 square feet, with plans to consolidate its Chicago operations and triple its workforce to about 3,000 employees over three years. It has since scaled back its footprint and hiring plans by about a third.
Uber now has about 1,500 Chicago office workers, with about half employed by Uber Freight, the company said. It plans to expand to more than 2,000 employees in Chicago.
“We’re in full hiring mode,” Lior Ron, head of Uber Freight, said Tuesday.
Uber is occupying about 310,000 square feet at the Old Post Office, including the entire ninth floor, parts of the eighth floor and a private rooftop deck. The company is subleasing about 150,000 square feet of its original space to other tenants on the eighth floor.
The new office features a full-service kitchen, executive suite, grand hall, gender neutral restrooms, library spaces and other amenities. The roof includes event space and sports courts. But the biggest feature is simply the sheer size of the contiguous office.
“The floor plan allows us to actually have the entire team collaborate together on one floor,” Ron said. “It’s essentially like four football fields connected or like a skyscraper basically tilted on its back.”
Ron said the office will initially be open on a voluntary basis for Chicago employees, many of whom continue to work remotely. Uber is expecting most employees to be back in the office by the “beginning of next year,” he said.
Uber had nearly 23,000 employees in 71 countries at the end of 2020, according to the company’s annual report. In May 2020, Uber announced companywide reductions of 6,700 full-time employees as revenues declined during the pandemic.
Uber Freight, however, has been a growth engine. The platform has more than 1 million truck drivers hauling freight for about 9,000 shippers including Anheuser-Busch InBev, Niagara, Ocean Spray, Land O’Lakes and Nestle.
In 2020, Uber Freight generated $1 billion in revenue, according to financial statements, and has accelerated to a rate that would produce $1.7 billion in annual revenue, Ron said.
“From a business perspective, Uber Freight has a lot of momentum,” Ron said. “We started from nothing just four years ago.”
Ron said the ability to “tap into the universities” and Chicago’s talent pool has enabled the business to recruit and ramp up logistics professionals quickly. The opening of a new technology hub at the Old Post Office will have “dozens of engineers” working alongside the operations staff, he said.
Another boost for the Chicago operation will be the $2.25 billion acquisition of Texas-based logistics firm Transplace, which was announced in July but has yet to close.
While Uber Freight has been growing, the core ride-sharing business has had a bumpy road during the pandemic, with declining revenues, skyrocketing rates and a shortage of drivers, at least in Chicago.
In April, Uber announced a $250 million incentive package to recruit drivers in Chicago, temporarily boosting the hourly rate for those working at least 20 hours a week by nearly $5 to more than $33 per hour. The program remains in place, the company said Tuesday.
Uber saw a 9% increase in the number of active drivers in Chicago during September, with about 30,000 now plying city streets, the company said.
Uber revenues declined 14% to $11.1 billion in 2020, led downward by its ride-sharing business. But both the freight and delivery business — Uber Eats — gained traction and continue to grow this year, while ride-sharing has been recovering.
The company, which has lost money since it was launched more than a decade ago, said in a Securities and Exchange Commission filing last month that it could make an adjusted profit of up to $25 million in the third quarter. Uber is set to report results Nov. 4.
Uber’s move into the Old Post Office provides an anchor tenant of sorts and represents a significant moment in the conversion of the long-vacant building into modern offices, one of the most ambitious Chicago redevelopment projects in recent history.
Completed in 1921 and greatly expanded in 1932, the massive post office has long loomed over the Eisenhower Expressway as a gateway to downtown Chicago. After sitting vacant for nearly two decades, New York developer 601W Cos. bought the building in 2016 and undertook an $800 million renovation, creating 2.5 million square feet of office and event space.
The Old Post Office reopened in fall 2019 and has attracted tenants such as Walgreens, PepsiCo, Ferrara Candy, Cisco Systems and CoinFlip.
rchannick@chicagotribune.com
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