Alphabet Inc. (NASDAQ:GOOG)(NASDAQ:GOOGL) has announced it is expanding into the ride-sharing business--but only in San Francisco, at least to start with.
Google is the owner of Waze, a crowdsourced mapping and navigation app. Waze recently launched a ride-sharing pilot targeted at people around Google’s headquarters. After some success with the initial rollout, Waze is expanding its program to cover all of San Francisco.
Waze works a little different than Uber or Lyft, its two giant competitors. Instead of acting as a private taxi, Waze targets people who want to join a carpool. In exchange for sharing their space with other commuters, Waze is offering rides at a discount compared to its competitors.
In short, Waze wants to attract people going in that direction anyway, rather than creating a new trip. It’s just enough of a difference for it to differentiate itself from its competitors.
If this pilot program really gets off the ground, it could be an interesting development for Uber, the giant in the space. One of the reasons why it has been able to keep Lyft, its main competitor, at bay is because it has far more financial clout, with a valuation of $68 billion U.S. versus $5 or $6 billion. But Google is worth almost eight times what Uber is worth, and it has plenty of profits to spend. Uber continues to bleed cash each quarter.
Competition between the two once friendly peers looks poised to rise in the future as Google searches for ways to get into the lucrative ride-sharing industry.
