If you thought that Uber fares were as cheap as they get, then think again as Google has launched a new ride-share service in California named Waze that claims to offer rides at much cheaper rates.
According to a report in the Wall Street Journal (WSJ), the Mountain View-headquartered company started the pilot in May allowing thousands of area workers at specific firms to use the Waze app to connect with fellow commuters. The company is expected to open the pilot for all San Francisco area Waze users soon with hopes of expanding the service if successful.
Waze, which Google acquired in 2013, offers real-time driving directions based on information from other drivers. However, there is a basic difference between Waze and apps like Uber and Lyft. While Uber and Lyft operate under on-demand taxi model, Waze aims to connect people and share a ride if they are headed in the same direction.
The company has said it aims to make fares low enough to discourage drivers from operating as taxi drivers. Waze’s current pilot charges riders at most 54 cents a mile—less than most Uber and Lyft rides—and, for now, Google doesn’t take a fee. However, Google’s entry into ride-sharing could lead to skirmishes with Uber, a seven-year-old firm valued at roughly $68 billion that largely invented the concept of summoning a car with a smartphone app.
The companies also share histroy. Google had invested $258 million in Uber in 2013. 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 with the help of none other than Brian McClendon, often called the father of Google Maps.
Another battlefront for the two companies is the driverless cars. However, Uber and Lyft have declined to comment on Waze.
But Google may be betting on Waze’s success in Israel where the company had started testing a carpool service for Israeli commuters. The Waze ride-sharing service is now available at all hours in most parts of Israel.
In the San Francisco pilot, any local Waze user can sign up as a driver, but ridership is limited to roughly 25,000 San Francisco-area employees of several large firms, including Google, Wal-Mart Stores Inc. and Adobe Systems Inc. Riders are limited to two rides a day—intended to ferry them to and from work.
In the planned expansion, anyone with the Waze app in the San Francisco area could sign up to be a rider or driver, the person said. Though Google currently doesn’t collect a fee, the company is exploring different rates in Israel and San Francisco, the person familiar with the matter said.
Like Uber and Lyft, Waze’s drivers aren’t employees of the company, the person said. Unlike Uber, Google doesn’t plan to vet drivers for a Waze service, instead relying on user reviews to weed out problem drivers, the person said.
Waze, which operates as its own unit within Google, boasts 65 million active users, many of whom alert other users to police or traffic accidents, another added feature that none of its rivals sport.