Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Buying Uber might give Google a ride into the future

Zach Miners | Feb. 5, 2015
The companies look set to become rivals, with Google reportedly building a ride-hailing app.

Google CEO Larry Page likes to talk about taking "big bets" into new areas like driverless cars and delivery services. An acquisition of Uber might be a gamble that could pay off for both companies.

The companies are heading in some of the same directions. Both Uber and Google are now working on driverless car technology and transportation and delivery services. On Monday, Uber announced the creation of the "Uber Advanced Technologies Center" in Pittsburgh through a partnership with Carnegie Mellon University, which will focus on long-term technology in the areas of mapping, vehicle safety and "autonomy technology."

Were Google to acquire Uber, it might head off a possible confrontation between the companies as both push deeper into developing similar services.

There's no clear sign that Google is actually trying to buy Uber, which has been valued at more than US$40 billion. But it's already a major investor, having put at least $258 million into Uber, and it may have good reasons to go all the way to a buyout.

Delivery is one business where the companies might be better off together, with Uber's transportation know-how and Google's consumer data.

Both are just getting their feet wet in this area. Google has its same-day Shopping Express service, which uses cars to deliver items from select retailers, though currently only in a handful of cities including San Francisco, Chicago and Boston. It's also looking to use drones to deliver items from the sky, like packages for disaster relief, through its Project Wing initiative. Uber, meanwhile, began testing a cargo delivery service in Hong Kong last month, and has also tested fast food delivery in Los Angeles. Its UberRush courier service for package delivery is available in New York City.

Increasingly, Google knows what people want and where they go, while Uber knows how to manage things that move around.

"Google buying Uber makes a tremendous amount of sense as long as Google understands that it's not buying a ride hailing or ridesharing service, it's buying a new transportation platform," said James McQuivey, an industry analyst at Forrester who studies digital disruption among major consumer companies.

"In some ways, Uber will never become the Uber it promises to be if it doesn't team up with a company that knows as much about you -- and has as much permission to offer solutions to you -- as Google does," he said.

The companies may also be heading for a showdown on Uber's turf. Google is preparing to offer its own ride hailing service, according to a report in Bloomberg Business on Monday, though a subsequent Wall Street Journal report said the app was geared more toward internal employee carpooling.

 

1  2  Next Page 

Sign up for Computerworld eNewsletters.