Finally Waze is made Useful by Google

First things first – the definitions that separate the ride sharing from car sharing also factoring in short and long durations are getting so blurry that new companies are emerging to attack these very fine lines that separate these solutions. A good example is Uber and its controversial products in many markets and the most recently suspended UberPOP in France. Another example on the farther end is the 20 million subscriber plus long duration city to city ridesharing service Blablacar that is growing at a fast pace. The problem that UberPOP faced in France is not new to Uber but the aggression shown by the traditional taxi community and governments is a first.

rApparently Uber had already appealed a law named “Thevenoud Law” that went into effect earlier in 2015 that challenged services like UberPOP to follow the same regulations for training and licensing as traditional taxi drivers. Prior to this was the 15 minute law that even gave birth to UberPOP after French authorities said UberX and Uber drivers have to wait 15 mins before picking up a passenger. It is very easy to take sides on this matter arguing the legitimacy of such a service but the fact remains that technology‘s influence in shaking up the traditional transportation market requires a fine balance.

Google, Google and more Google - First things first, Waze was a pricey acquisition for Google almost at $1.1 billion competing with the likes of Facebook and Apple. Arguably the world’s best crowdsourced map, navigation and real-time service that has more than 50 million users, Waze prides itself more as a big data company rather than a specific navigation service provider. And for long after the acquisition in 2013, Google did not show any interest in integrating Waze into its mainstream mapping products leading many to think what really is happening.

That is where the announcement this week from Google on its official transportation service launch in Israel RideWith using Waze marks the first of many. Few observations below

• RideWith is a carpooling service that will be launched in 3 cities in Israel and unlike Uber’s controversial offerings; Google is planning on making this clean and simple.
• As a carpooling service, RideWith will allow drivers to only offer 2 rides a day and the location has to be closer to their work or where they live. As the independent article nicely puts it, the baseline conclusion here is that no one will leave their day jobs and become a full-fledged Waze driverJ
• Participating drivers cannot expect huge profits or earnings from this because the service allows them only to get paid a small amount just for normal wear and tear, gas and other ordinary expenses based on the distance. Again this is to make sure the UberPOP type business greed doesn’t creep in that will make another legal hassle for Google. The expected rates as suggested by Google are about $3.46 for a ride from Tel Aviv to Herzliya. Google will take about 15% of the overall fee as its cut.
• Google wants to use Israel as a test bed and then progressively use the results from this Pilot to launch the service in other cities.
• Despite the claim from Waze that this service does not compete with the Uber and Lyft model, the truth remains is that given the oppositions faced by UberX in Israel, the 200,000 people who carpool very commonly in Israel and the fact that Google is setting up the service not to rub shoulders with the regulatory authorities all indicate that the service will definitely compete with the taxi apps.
• The overall usage of RideWith resides in 2 apps, one that is a match maker and the other which is the routing app all limited to only Android users at the moment.

 Why does this Matter?- Despite being an early investor in Uber, Google and Uber have drifted away in the recent years with Google making a public announcement that they will offer a competing service to UberPool officially marking its entry into the new technology-enabled transportation market. But besides this open competition, there are a few other finer details that matter

• It is no secret that Uber with its acquisition of DeCarta, part of bing maps on the 3D imagery side and CMU National Robotics Engineering Center (NREC), a total of 50 folks covering developers, commercialization specialists and grant finders that the company is really serious about combining its transportation offers with automated technology. And despite being almost out of the race on HERE acquisition, this was also another effort to boost its overall research and development in the automation arena.
• Google on the other hand is way too deep into the automated game clocking close to a million miles of testing and the only missing element was linking this to a shared mobility model. One rumor that I always believed in and thought made more sense was applying higher levels of vehicle automation on a shared mobility model rather than focusing completely on the private car model where cost and packaging challenges exist. There is no better company than Google to exploit this technology in a model like Carpooling or ridesharing given its almost near complete mapping, analytics and service capabilities.
• Whoever succeeds, be it Google or Uber to go-to market first with their automated ridesharing service (small or big), the effect on the traditional transportation industry though a bit far off will be huge. We are talking here about a ridesharing/taxi service (Uber) that operates in more than 300 cities, clocks more than a million rides in a few cities and the cost of doing all of this is so much more leaner for them and Google is pretty much joining the same race. The problem will be more in a car dominated market like US where public transportation options are far and few but the impact on a market like Europe will be profound unless the regulators come in and back the automotive industry J
• What does this mean for traditional OEMs – I guess a few of the OEMs like BMW or Daimler who have realized the power of alternative mobility models and are also neck deep in their automation portfolio will roll up something very soon but the fact remains is that this is far more challenging for them than these pure play technology players. This might mean that the future of the transportation industry will be more technology than actually the cars themselves.