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Google to take on Uber with its expanded Waze ride-sharing service in San Francisco

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There is already a crowded market of competitive carpooling services, but Google is still planning to jumpstart its own ride-sharing business, reports WSJ. After running a pilot program with a ‘select group of employers’ in Bay Area in May, the tech giant is finally ready to connect more commuters with its Waze ride-sharing app.

Instead of exploiting Waze just for its mapping service, Google is now planning for it to run against and compete with popular ride-hailing services like Uber and Lyft. According to sources familiar with the matter, Google will open up the aforementioned Waze-powered carpooling program to all San Francisco commuters in the fall. But unlike Uber which acts like a cab aggregator, Waze will help connect riders with drivers who are already headed in the same direction.

By launching a carpooling service, the company wants to lower fares to the extent that it will discourage drivers from operating as taxi drivers. Anyone with the Waze app can sign up to be a driver in the San Francisco area. The current expanded program charges riders at most 54 cents a mile — which is considerably less than most Uber and Lyft rides. And the good(or bad) news here is that Alphabet-owned Google doesn’t take a cut or fee of the ride at the moment. But it is said to be exploring different rates in Israel and San Francisco.

Also, unlike Uber, the drivers operating on the Waze app won’t be employees of the company. Sources say that Google doesn’t plan to evaluate and rate drivers on the ride-sharing service, but instead will rely on user reviews to weed out problematic drivers and riders.

According to Wall Street Journal,

The company says it doesn’t believe Waze drivers’ income is taxable because it considers payments through its service effectively as money for gas.

Google believes that Waze is a part of their larger ambition to define the future of transportation. This also gives the Mountain View-based tech giant an out to start testing its autonomous driver-less vehicles using the ride-sharing model. The company execs have identified this as a potential business model for its self-driving technology. However, neither Google, nor Uber, will be the first one to run a public trial for its autonomous ride-sharing service. An MIT spin-off startup NuTonomy has already launched and started booking self-driving cab rides in Singapore.

In the aforementioned trial program, any local Waze was able to sign up as a driver, but the ridership was limited to roughly 25,000 employees of several large firms, including Google, Adobe, and Walmart. The rides were capped and the riders were only allowed two rides a day — intended to ferry them to and fro from work. A similar ride-sharing program was also conducted in Israel, in conjunction with RideWith.

Before navigating into Uber’s turf, Waze was working on connecting drivers using crowdsourced navigation information. This means that users could report an accident, any road obstacle or traffic jams on the app, and this would be update in real-time to all users. One could, thus, avoid traffic and take a different route to reach work on time. Google acquired Waze in 2013, and merged the same crowdsourced navigation data into its own primary mapping app — Google Maps. Waze as an independent service, however, boast to still have over 65 million active users on its platform.

Before working on similar technologies and betting against each other, Uber and Google seemed to have a pleasantly close relationship. The tech giant had also invested over $258 million into the cab aggregator’s business in 2013. Though they are now rivals, the ultimate goal for the transportation system of the future remains the same — driverless cars. Google has already been conducting on-road tests for about 2 to 3 years now, and Uber is also gearing up to launch a fleet of autonomous self-driving Volvo taxis in Pittsburgh next month.

A hands-on guy fascinated by new apps, technologies and enterprise products.

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