Is Google disrupting the ride-hailing business with Waze Carpool?
As Google prepares to expand a carpool program to all of San Francisco, it is looking to upend the ride-share model in one of the service's largest markets – and the home of Uber, now a rival to Google's own ride-sharing aspirations.
Unlike Uber and Lyft’s on-demand taxi service, the Google program is strictly a carpool service. Google, by way of the Waze navigation app it acquired in 2013, will connect commuters only to drivers already heading the same direction.
Google plans to open the service to all of the San Francisco Bay Area in the fall, a source told The Wall Street Journal, after a pilot launched in May for employees of select Bay area companies including Wal-Mart stores, Adobe Systems, and Google proved successful. Riders will only be able to hail a ride twice a day: once to work, and once home.
"One driver, one rider, one car less on the road," Waze advertises on its website. "Waze Carpool is an easy way for everyone to: Help each other out, spend less money on commute costs, make the most of a drive that's happening anyway, support a greener commute with less cars on the roads."
The Waze Carpool program builds on the Waze app, which displays real-time traffic conditions, and alerts users to accidents and police. Through Waze Carpool, a driver will be able to carry a limited number of passengers, who will reimburse them up to 54 cents per mile (the 2016 IRS standard mileage rate for business travel) for gas and vehicle maintenance.
Online carpool programs have been around for years, as Cristina Maza reported for The Christian Science Monitor in July 2015. In Britain, Carpooling.com connects drivers and passengers that share a destination, allowing them to also share the cost of the trip. In San Francisco, Carma Carpool has an app that allows drivers and commuters to share rides to and from work. Waze Carpool resembles these earlier models, while also taking a departure away from Uber and Lyft.
The ride-hailing giants allow drivers to turn their own vehicles into a taxi service, giving them a chance to supplement their income and be their own boss. They offer unlimited rides to passengers, anytime of day or night.
In the process, Uber, especially, has attempted to turn a profit. It has attempted to justify it is worth its more than $60 million valuation, although Gautam Gupta, Uber Technologies Inc.'s finance head, said last week the company lost $1.27 billion in the first half of this year, according to The Los Angeles Times.
Google, on the other hand, said it doesn’t initially plan to subtract a fee from the Waze service, although it is exploring ways to do so in the future in San Francisco and Israel, where Waze was founded, and Google first introduced the carpool program, a source told The Wall Street Journal.
Waze Carpool sets to further pit Google against Uber, a company it invested $258 million in 2013, but is now becoming a rival to, as Google chases its own ride-hailing ambitions. Uber's map program was originally based on Google Maps, but the company has started to develop its own mapping program. In a further sign of this building tension, David Drummond, senior vice president of corporate development for Google’s parent company of Alphabet, has resigned from Uber's board because of potential conflicts with Google's venture into transportation.
Now, the two companies are in race to put autonomous cars for ride-hailing. Uber recently announced it is launching free public trials of its new autonomous vehicles in Pittsburgh.
This report contains material from the Associated Press.
