Google plans to offer carpooling service via its Waze app to the broader San Francisco area beginning Fall 2016. The company originally tested carpool services with Waze in Israel in 2015 (now broadly available in Israel), and then launched a pilot program near its CA headquarters in May 2016. The next step is reportedly the San Francisco pilot for roughly 25k employees of large San Francisco firms including Wal-Mart Stores and Adobe, in which riders will be limited to two rides a day (for commute). Longer-term, the plan appears to be a broader SF roll-out for all Waze app users in the area.
Waze is a popular navigation app in which users can post notifications and alerts about traffic, accidents, police activity, etc. Google acquired Waze in 2013 for $966mn, which has grown to 65mn active users and continues as its own unit within Google. The carpool feature is similar to that of Uber and Lyft, but not exactly apples to apples. Whereas the latter focuses on a taxi-like service, Waze carpool aims to connect riders to drivers already going a >certain direction. Google is keeping cost per mile quite low (max $0.54/mile) to discourage full time drivers, and as of now, is not taking a cut of the fee. [Recall what Eric Schmidt, Google’s Chariman said, we basically start from Zero. Anybody who wants to compete with us have to bleed] Additionally, Eric hinted this about 2 months ago in his Bell Labs insight on Artificial Intelligence.
It is evident from Eric’s speech about Google’s increasing interest in transportation and continued investments in autonomous driving have created an element of competitive tension across the industry. At this point, monetization plans are less clear and likely not meaningful for some time. That said, Google could capture immediate benefits from incremental data provided by carpool users (travel destinations, traffic, etc.) for ad targeting efforts, and for self-driving auto initiatives.