What's going on?
Google is preparing to muscle in on Uber’s ride-sharing turf in a sign that one of the world’s biggest companies is preparing to join a burgeoning (potential) personal transportation revolution.
What does this mean?
Google owns a navigation app called Waze, which allows its users to share information with one another (e.g. about a traffic jam) to help navigate through traffic. According to a report in the Wall Street Journal, Google plans to offer its Waze-powered ridesharing app to everyone in San Francisco starting this fall. Waze drivers will receive a lower fare than Uber drivers: the idea is to encourage people that are already driving somewhere to give someone else a lift (a.k.a. carpooling) but to discourage professional drivers from using it for income.
Alphabet, Google’s parent company, was an early investor in Uber. In a bit of (probably) related news, Alphabet’s representative on Uber’s board has stepped down, citing a conflict of interest.
Why should I care?
For the markets: If the revolution is coming, there will be winners and losers.
Tech companies, like Uber, Alphabet or others, could grow to dominate personal transportation. That threatens the existing auto companies, although they are already trying to adapt. But there will also be less obvious winners and losers. For example, mapping technology will likely only get more important over time.
Bigger picture: Just because Google enters a space doesn’t mean it’s game-over for the incumbents.
There are plenty of instances where Google entered a market and took over from incumbents, e.g. Gmail (versus Hotmail, etc.) or Google Maps (versus traditional navigation systems). But, there are also some very prominent examples of where Google entered a promising space and failed, e.g. Google+ (versus Facebook) and Google Buzz (versus Twitter, Facebook and others). So, Google offering ridesharing doesn’t necessarily mean it will be a deathknell for the Ubers and Lyfts of this world.