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Starsky Robotics Downsizes Over-The-Road Trucking Fleet

While Starsky Robotics says it remains committed to developing Level 4 autonomous vehicle technology, the company's over-the-road trucking fleet is not faring as well. Starsky recently decided to downsize the OTR fleet.

Benzinga · 12/24/2019 14:14

While Starsky Robotics says it remains committed to developing Level 4 autonomous vehicle technology, the company's over-the-road trucking fleet is not faring as well. Starsky recently decided to downsize the OTR fleet.

The 3-year-old startup is best known for its fully unmanned truck trip on a 9.4-mile stretch of public highway on the Florida Turnpike earlier this year. Less is known about Starsky's small trucking fleet, founded in 2017 to generate revenue to fund its self-driving efforts.

In an email to drivers dated Dec. 4, Starsky stated that a significant downturn in rates the past few months caused the trucking company "to operate at a loss."

The company also blamed increasing insurance premiums, equipment repairs and lease expenses as contributing to fourth-quarter losses in 2019.

"These depressed market conditions and financial pressures have forced us to re-evaluate the size of our over-the-road trucking operations to remain viable," according to the email sent to truck drivers from Starsky's operations team.

Starsky, headquartered in San Francisco, had 20 drivers and 33 power units, according to the Federal Motor Carrier Safety Administration SAFER website.

Starsky co-founder Stefan Seltz-Axmacher declined to comment about how many trucks, if any, were hauling freight as of press time on Dec. 23.

Seltz-Axmacher also failed to address rumors about the financial health of the other side of Starsky's operations and its recent plans to ramp up to 25 driverless trucks by 2020.

Since 2017, Starsky has raised more than $20 million in equity from investors like Trucks VC and Shasta Ventures.

Starsky has won plaudits for its commitment to innovation. It recently was named No. 12 on the FreightTech 25 list. It faces stiff competition from other self-driving startups like TuSimple, which has raised around $298 million in the last six rounds of funding. United Parcel Service (NYSE: UPS) has a minority stake in TuSimple's autonomous trucking operation.

Plus.ai has raised around $200 million in its last three rounds of funding, according to Crunchbase, and Ike has raised $52 million in Series A funding.

Just days before Thanksgiving, Stacey Sprowl, a former truck driver for Starsky Robotics, said she was at home in Oklahoma waiting to hear from her dispatcher about her next load when she received instructions to drive her tractor-trailer nearly 200 miles to Dallas and turn in her leased equipment.

After cleaning out her truck, she drove it to Dallas, and Starsky paid for her rental car to drive back home.

"I was told we were going with new leasing companies for our equipment and I would be assigned a new truck and trailer on Dec. 2," Sprowl told FreightWaves. "The following Monday and Tuesday came and went with no word about my new truck assignment, then on Wednesday I found out the company was downsizing and my services were no longer needed."

"I was really upset — it was the best place I had worked — and they paid me 50 cents per mile if I hit a certain number of miles each month, which I always did," Sprowl said.

One vendor, who is owed more than $7,000 from Starsky, said the company always paid its invoices on time until just prior to its downsizing announcement regarding its trucking fleet.

"I never had any problems before, but then just like that, they stopped communicating with me about my outstanding invoices," the vendor, who did not want to be named, told FreightWaves. "The company relied on brokerage freight and leased all of its equipment, so I can see why they weren't able to make a profit."

The company stressed that it isn't ceasing operations at this time and if freight conditions improve in early 2020, Starsky "may reach out" to drivers to determine their availability to return to work.

Image Sourced from Pixabay