The days of standing on a street corner and hailing a taxi are long dead. Today, people summon a car to wherever they are in minutes at the push of a button. Ridesharing isn’t just a phenomenon or trend, it’s the present and future of transportation. And no one has done ridesharing better than Uber. That’s partly because they were among the first to market with the idea, but also because they have the deepest pockets, currently having a valuation of more than $68 billion. But now, there are deeper pockets entering the ridesharing industry – Google. With a $527 billion valuation, Google parent company Alphabet eclipses Uber in terms of coffers. But is money enough for Google to derail Uber?
Is Money Enough for Google Rideshare to Derail Uber?
While no one knows exactly how much the ridesharing industry generates each year, it is such a valuable industry that Uber has more cars on the road in New York City than there are traditional yellow medallion cabs. Billions upon billions of dollars are spent annually on consumers choosing to hail a car than hop in a cab. And Google wants in.
Google has been working on improving transportation for years. Google Maps is the go-to navigation tool for more than 100 million users. And Google invested in navigation app Waze in 2013 for $1 billion to ensure real time data accuracy from its users. Now, Waze is planning to expand a carpool service on its platform, bringing Google up directly against Uber. The service has already been tested in Israel and San Francisco without any problems, and is ready to launch in the next few months in select U.S. and Latin America cities.
Google and Uber have worked together in the past, with Google investing in Uber and even integrating Google Maps into Uber’s operating system. But now, they are going head to head in transportation, not only here but in the race for driverless cars, as well.
Who’s got the edge?
Uber has the experience, credibility, and brand recognition. But Uber also has a laundry list of PR nightmares surrounding its company culture and safety issues amongst drivers. On top of that, users have notoriously been deleting their Uber accounts following Uber’s lack of solidarity with New York taxi drivers to protest President Trump’s travel ban. At the time, it was seen as a money grab by Uber, and many users felt disgusted not only by that action but by CEO Travis Kalanick joining Trump’s advisory board. Kalanick later resigned from that position following public outcry from Uber’s users.
Alphabet has deeper pockets, and a much healthier and happier company culture, with Google consistently ranked as one of the top places in the world to work. But more importantly, the services will differ. Waze’s plan is not to be a more convenient taxi service, but to convince people to give each other rides to work. Waze users would pick up other Waze users headed in the same direction for a few bucks. Drivers could then utilize the carpool lane in addition to helping cover the cost of gas, with fares set at about a third the cost of using uber, and slightly more than taking a train or bus.
With 80 million active users on Waze, Google has an advantage in numbers over ridesharing companies such as Uber and Lyft, along with real time traffic data to make every ride more efficient.
Get to know more about Waze by watching the video below:
Uber may have a head start, but Alphabet should close the gap fairly quickly behind Waze’s dedicated user base. With shares of Alphabet (GOOG) trading near its all time high, it’s tough for traders to believe the stock will continue up. But as a long term play, shares will continue UP.
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