Google owns a bit over 5% of Uber at 70B and a very high percentage of waymo at 30B evaluation. (last measured) so incentive is for Waymo to succeed / grow.
It seems counter intuitive to me that they do a strategic partnership with Uber given low switching cost of using another app if it had meaningful cost benefits to the consumer. Additional Google owns the Android platform so could leverage that to it's advantages as well.
But Uber is already in a world of low margins marketplace matching. The deal is likely highly favorable to Google in that it need only compete with the the humans so can start to recover some of it's investment without having to directly compete on a platform basis which would be expensive per city high density rollout.
Google won't have the same driver density as Uber for a long time and for an app to be your go to ride system it had to always be fast to get a ride.
For high utilization on Google side also benefits being part of Uber platform of on tap riders.
All said, the existence of Lyft and numerous other transportation apps globally impacts the value Uber can extract. More autonomous vehicles will quickly follow Waymo and an integrated network will dominate at some point. Just like Amazon using its own delivery infra once it reached a certain scale.
I don't see this being a long term relationship. Once a given density is reached Google can leverage Android / Google maps / cost competition to push people over and why would Google / Waymo continue to pay Uber market place margin on "it's phone platform". Google will be leveraging said platform to compete with integrated networks like Tesla, Amazon zoomx, cruise, wherever apple lands and others globally.
Interesting thoughts. I was actually going to say that _Uber_ had the advantage in this deal, since it owns the customer relationship and can shape demand toward or away from Waymo.
Google has a distribution channel via Android, but I don't think it's strong enough (otherwise Stadia would still be around). They'd still have to build a destination for consumers to remember, in addition to the interface, matchmaking, billing, etc.
I guess in any deal like this, there's the potential for advantage and disadvantage from both angles. As Clay said, a good compromise is one where both parties are dissatisfied.
Are you sure? Below lotsofpulp pointed out that they're not listed as a major holder [1] and there was news in 2019 about them considering selling their stake [2]
Yes, but I think amelius is suggesting that Google could put a button in Google Maps that called a Waymo (and just a Waymo). That's what could run afoul of antitrust laws.
It seems counter intuitive to me that they do a strategic partnership with Uber given low switching cost of using another app if it had meaningful cost benefits to the consumer. Additional Google owns the Android platform so could leverage that to it's advantages as well.
But Uber is already in a world of low margins marketplace matching. The deal is likely highly favorable to Google in that it need only compete with the the humans so can start to recover some of it's investment without having to directly compete on a platform basis which would be expensive per city high density rollout.
Google won't have the same driver density as Uber for a long time and for an app to be your go to ride system it had to always be fast to get a ride.
For high utilization on Google side also benefits being part of Uber platform of on tap riders.
All said, the existence of Lyft and numerous other transportation apps globally impacts the value Uber can extract. More autonomous vehicles will quickly follow Waymo and an integrated network will dominate at some point. Just like Amazon using its own delivery infra once it reached a certain scale.
I don't see this being a long term relationship. Once a given density is reached Google can leverage Android / Google maps / cost competition to push people over and why would Google / Waymo continue to pay Uber market place margin on "it's phone platform". Google will be leveraging said platform to compete with integrated networks like Tesla, Amazon zoomx, cruise, wherever apple lands and others globally.