SAN FRANCISCO-Uber will be facing new competition from Google (NASDAQ:GOOGL) in the ride sharing business. Google is preparing to expand a San Francisco carpooling program. The plans will build upon a test service that Google’s navigation app Waze launched three months ago in the San Francisco Bay Area. Waze which Google acquired in 2013, offers real-time driving no directions based on information from other drivers. Waze wants to connect riders with drivers who are already headed to the same direction. The company plans to make fares low so drivers can not act like a taxi driver. Riders are currently charged 54 cent a mile in the pilot program which is less that most Uber and Lyft rides. Google also doesn’t take a fee.
Only six companies can use Waze. Employees from Google, Wal-Mart Stores and Adobe Systems can request rides. According to spokeswoman Julie Mossler, the test have worked and allows Waze to move into the next phase and will allow anyone in the Bay Area with the app to request a ride by the end of this year. Google and Uber were once allies. Back in 2013, Uber received a $258 million investment from Google according to the Wall Street Journal. Alphabet executive David Drummond said on Monday that he resigned from Uber’s board because of rising competition between the pair. Uber, which has long used Google’s mapping software for its ride-hailing service, recently began developing its own maps.
According to, Uber CEO Travis Kalanick confirmed Drummond’s departure from the board Monday in a statement that described him as a sage adviser and great personal friend. Kalanick also said he looked forward to “continued cooperation and partnership” with Alphabet.
Trips on Waze are limited to riders’s work or home with a maximum of two trips per day. Riders can request rides at anytime. Waze is primarily focusing the service on providing trips during peak commute times in the mornings and evenings. Waze only allows on rider per vehicle. Uber’s around-the-clock service is used as way for its drivers to make a decent living or extra income.
Uber and Lyft declined to comment.
The Wall Street Journal spoke to Ben Schachter, an analyst at Macquarie Group Ltd. , who said a Waze ride-sharing service is a natural next step for Google, which has made clear its intentions to move into transportation. He warned that the company would need to navigate several potential pitfalls, including legal and safety issues.
“I don’t think they’ve had any significant experience in a lot of the issues that will surely arise around” starting a ride-sharing business, Mr. Schachter said.
CBS News has reported that over the pass several years Google has been building self-driving cars. Uber is also designing its own robot-powered vehicles and is using some of the autonomous cars to provide rides in Pittsburgh.
Waze was founded in Israel. Furthermore, they state that Google started testing a carpool service last year for Israeli commuters on using Waze. It went big and the ride-sharing service is now available at all hours in most parts of Israel.
According to, Waze operates as its own unit within Google, has 65 million active users. Some of the users alert other users to police or traffic accidents. Robert Rickett, a 29-year-old nonprofit worker in Sacramento, Calif., said he uses Waze for navigation daily, particularly while driving for Lyft in the evenings. But he said he wouldn’t abandon Lyft for a Waze ride-hailing service, unless it offered him better opportunities as a driver.
“They have a lot of people who trust Waze,” he said. “If they can capitalize on that, they could pull some market share.”