Google Is Developing Its Own Uber Competitor
Exclusive: Google Is Developing Its Own Uber Competitor
The two companies are going to war over self-driving
taxis
by Brad Stone 2:10 PM PST February 2, 2015
Uber faces an ever-growing cast of adversaries that includes
dubious regulators, litigious drivers, hostile members of the press, and some
well-funded rivals. But the most significant threat to the app-based
transportation company may be much closer to home: one of its biggest
investors, Google.
Google Ventures, the search giant's venture capital arm,
invested $258 million in Uber in August 2013. It was Google Ventures' largest
investment deal ever, and the company put more money into Uber's next funding
round less than a year later. Back then, it was easy for observers to imagine
Google teaming closely with Uber, or even one day acquiring it. David Drummond,
Google’s chief legal officer and senior vice president of corporate
development, joined the Uber board of directors in 2013 and has served on it
ever since.
Now there are signs that the companies are more likely to
be ferocious competitors than allies. Google is preparing to offer its own
ride-hailing service, most likely in conjunction with its long-in-development
driverless car project. Drummond has informed Uber's board of this possibility,
according to a person close to the Uber board, and Uber executives have seen
screenshots of what appears to be a Google ride-sharing app that is currently
being used by Google employees. This person, who requested not to be named
because the talks are private, said the Uber board is now weighing whether to
ask Drummond to resign his position as an Uber board member.
Uber is also teaming up with Carnegie Mellon University
for a research facility in Pittsburgh, Pa., to develop its own autonomous
vehicle technology, the company announced on Monday. (The news was reported
earlier by TechCrunch.)
Google has made no secret of its ambitions to
revolutionize transportation with autonomous vehicles. Chief Executive Officer
Larry Page is said to be personally fascinated by the challenge of making
cities operate more efficiently. The company recently said the driverless car
technology in development within its Google X research lab is from two to five
years from being ready for widespread use. At the Detroit auto show last month,
Chris Urmson, the Google executive in charge of the project, articulated one
possible scenario in which autonomous vehicles are patrolling neighborhoods to
pick up and drop off passengers. “We're thinking a lot about how in the
long-term, this might become useful in people's lives, and there are a lot of
ways we can imagine this going,” Urmson said in a conference call with
reporters on Jan. 14. “One is in the direction of the shared vehicle. The
technology would be such that you can call up the vehicle and tell it where to
go and then have it take you there.”
Those comments, according to the person familiar with
deliberations of the Uber's board, have left executives at Uber deeply concerned—for
good reason. Google is a deep-pocketed, technically sophisticated competitor,
and Uber’s dependence on the search giant goes far beyond capital. Uber’s
smartphone applications for drivers and riders are based on Google Maps, which
gives Google a fire hose of data about transportation patterns within cities.
Uber would be crippled if it lost access to the industry-leading mapping
application, and alternatives— such as AOL's MapQuest, Apple Maps, and a host
of regional players—are widely seen as inferior.
Google’s entrance into the ride-sharing market would also
leave Uber without a partner in the suddenly plausible future in which cars
without steering wheels roam the streets. Uber will either have to develop the
technology itself or form an alliance with a company that can if it wants to
offer autonomous vehicles within its fleet. Mercedes, Audi, Tesla, and other
carmakers have said they are developing driverless cars, though it's not clear
that any is as advanced as Google's.
An Uber spokesperson declined to offer a comment for this
article. A Google spokesperson also declined to comment, although the company
issued a cryptic tweet.
Travis Kalanick, Uber’s CEO, has publicly discussed what
he sees as the inevitability of autonomous taxis, saying they could offer
cheaper rides and a true alternative to vehicle ownership. “The Uber experience
is expensive because it’s not just the car but the other dude in the car,” he
said at a technology conference in 2014, referring to the expense of paying human
drivers. “When there’s no other dude in the car, the cost [of taking an Uber]
gets cheaper than owning a vehicle.”
There's already an additional sign of a rift between the
companies. Last week Google announced it would start presenting data from third
party applications inside Google Now, a service that displays useful
information prominently on the screen of Android smartphones. Google said it
had struck deals to draw data from such apps as Pandora, AirBnb, Zillow, and
the ride-sharing service Lyft. The company most obviously missing from that
list? Google’s old and possibly former friend, Uber.
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