Google-Uber: When Friends Start to Become Enemies

In Part II of The Godfather trilogy, Michael Corleone tells family confidante Tom Hagen that “I don’t feel I have to wipe everybody out, Tom. Just my enemies.” That, of course, was in the fictional mob world created by Mario Puzo. But in real life, the sentiment could just as easily apply to many Big Tech relationships.

Which brings us to Google and Uber. Once famous friends, with Google investing more than $250 million in the ride service in 2013, the wheels seem to be coming off this most kingly of Silicon Valley alliances. First it was the news Monday that Uber board member David Drummond, who’s also senior vice president of corporate development of Alphabet, Google’s parent company, stepped down recently over conflict of interest concerns. Then today, also via The Wall Street Journal, it became more clear why that happened: Google announced that it’s opening its Waze carpool service to the public right here in the Bay Area.

If you follow the tech world with the same exacting standards Michael Corleone used to pick off his enemies, then these developments are no surprise and nothing new. Last year, The New York Times foresaw all of this and more, while also offering insights into the Silicon Valley mentality, writing, “It was Microsoft, after all, that invested in Apple when Steve Jobs returned to the company in 1997, when it was in serious trouble.” And, in regards to Apple and Google’s once tight connection, “[T]he friendship dissolved after it became clear that Google was working on Android, a direct competitor to the iOS software that runs Apple’s phones and tablets.”

So maybe things started to sour between Google and Uber when the latter started investing in autonomous driving technology, one of Google’s pet projects since 2009. Or maybe it’s because Uber is developing its own mapping software, after long using Google’s industry-leading tech. Or perhaps this is just how things work in capitalism. Google is no stranger to “disruption,” if you will. If it’s something people spend money and time on, then Google has an interest (the company even entered the wireless game with Project Fi).   

But as for mobile-based ride services — we decline to use the inaccurate marketing term “ridesharing” — it will take a lot more than Waze carpooling for Google to make a dent in Uber’s market share. Uber’s closest competitor is Lyft, which recently shopped itself around and then rejected a $6 billion offer from GM. Uber is valued at more than $60 billion, and its autonomous vehicles debuted in Pittsburgh this week. Via anonymous sources, the Journal reported that Google plans to test its own driverless vehicles in an app-based ride-service format.

But before the gloves fully come off, it’s worth noting the concerning elements to the Waze rollout. Google will not be collecting revenue from each ride, which likely won’t last if the service becomes popular, meaning it will get more expensive eventually. And, a la old pal Uber, drivers will be independent contractors and not full-fledged employees, meaning they’re on their own for insurance, gym memberships, office happy hours, vehicle maintenance, gas, and snacks.

The real kicker, however, is the one that should raise all user and regulatory eyebrows: Instead of vetting drivers through background checks and other tried and true employment practices, Google will rely on user reviews to figure out who’s a good driver and who’s, oh, say, a sexual predator.

This is the business they’ve chosen.

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