Google and Uber Reportedly on a Collision Course

By Jaikumar Vijayan  |  Posted 2015-02-03 Print this article Print
Google and Uber

While Uber is eyeing autonomous vehicles, Google may be mulling a ridesharing service, reports say.

A close partnership between Google and ridesharing service Uber may be coming apart at the seams, with both companies apparently launching ventures that could put them in direct competition with each other.

Google, a major investor in Uber, is reportedly planning to launch a ridesharing service of its own while the latter has embarked on an autonomous car initiative rivaling Google's own efforts in this space.

Bloomberg Business on Feb. 2 reported that Google is preparing to launch an Uber-like car-hailing service that would work in conjunction with the company's self-driving car initiative. Google's vision apparently is one day to have its autonomous cars "patrolling neighborhoods to pick up and drop off passengers" in a manner similar to Uber, according to Bloomberg, which quoted unnamed sources it said were close to the company's plans.

Google's Chief Legal Officer David Drummond, who is a member of Uber's board of directors, has informed the ridesharing service about the company's plans, Bloomberg reported. It added that Uber executives have seen screenshots of a Google ridesharing application that is already being used by Google employees.

Google did not confirm or deny Bloomberg's report. In response to a request for comment, a member of Google's press team instead pointed, somewhat puzzlingly, to a Google tweet that read: "We think you'll find Uber and Lyft work quite well. We use them all the time."

Uber meanwhile on Feb. 2 announced plans to work on autonomous vehicle technology under a strategic partnership with Carnegie Mellon University (CMU). Uber and CMU have established an Uber Advanced Technologies Center near CMU's campus in Pittsburgh to do research and development work in mapping, vehicle safety and autonomy technology.

"As a global leader in urban transportation, we have the unique opportunity to invest in leading-edge technologies to enable the safe and efficient movement of people and things at giant scale," Uber Chief Product Officer Jeff Holden said in a statement announcing the partnership.

The new technology center represents a strategic investment in Uber's future, Holden said in what some saw as a signal of the company's intention to enter the self-driving vehicle space in direct competition to Google's autonomous vehicle efforts.

It's too soon to say how these moves will impact the existing relationship between the two companies. According to The Wall Street Journal, Bloomberg's story about Google's plans to launch an Uber-like service may have overstated the company's intentions. The screenshot of Google's ridesharing application that Bloomberg referenced in its report is actually just an internal carpooling application that Google employees use, according to The Journal.

Even if that were the case, Uber's autonomous vehicle effort would still put it at odds with Google, which along with TPG Capital, invested $258 million in the company in 2013. At that time, Uber said the money would be used to expand into new markets and to boost its rider and driver acquisition efforts.

Uber has one of the highest market valuations for any private company backed by venture capitalists. As of last December, the company was valued at just over $41 billion, a figure that makes it more valuable than 72 percent of Fortune 500 firms. Leaked documents obtained by Business Insider last year showed the company on track to generate $1.5 billion to $2 billion in revenues in 2014.


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