Alphabet’s entry into ride-sharing was inevitable. Waze’s Carpool pilot project is no Uber killer…today.
The Waze project will be tested in San Francisco. The service is not designed to be a serious money-maker for drivers. The service serves as a matchmaking service for drivers and commuters to connect and share a ride.
The rider receives an inexpensive trip to their office at a cost of $.54 per mile. This small fee is paid to the driver to offset fuel cost and vehicle wear and tear.
The UberPool product has some similarities to the Waze service, but there is an important difference. UberPool driver are driving in order to earn real money for their fares.
Scheduled, not on-demand
A big difference between Waze and UberPool is that Waze rides must be requested far in advance. For the morning commute, that might work, but the return home may be less predictable.
Waze to work, UberPool home
Fear of being stranded is a real concern. Many interested Waze commuters may shy away from the service if they find they can’t catch a reliable ride from work to home in the evening. They may get stuck working late on a project, and then can’t schedule a Waze ride home reliably. Instead, they may have to take an Uber home. If the customer is already using Uber or UberPool to commute, then Waze offers an interesting option. Otherwise, this ride anxiety issue may limit the uptake on the Waze Carpool service.
How many are commuting with Uber?
Uber is most often associated with a convenient way to get around town for nights out on the town or when short trips with frustrating parking are needed. Uber touts the fact that thousands of customers are using their UberPool service 5 times a week for more commute-oriented rides. Not bad, but small beer compared to the total number of rides Uber handles globally.
R.I.P Lyft Carpool
On the serious driver front, the UberPool and Lyft Line pitch to the drivers is that if two or more passengers are going a similar route, they can earn more than a single-rider fare. The problem is that reality has a way of getting in the way of this idealized scenario. In practice, UberPool drivers are finding the following situation playing out.
- There is no match for the UberPool ride. Instead, they are giving a discounted ride to a solo passenger, or
- The match is not that close. The driver ends up taking a couple of passengers, but the time for the pickup and destination dropoff detour offsets the gain in the extra passenger, especially considering the discounted rate.
It is worse for the UberPool customer. One customer has to give up valuable time and share their ride with a stranger for a minimal discount over a solo ride. As Uber creates more demand for UberPool, the matches will improve. At that point, everyone will benefit. For now, unlocking the value and potential of a shared ride remains elusive.
Lyft recently launched the Lyft Carpool service, which operated as a peer-to-peer commute service. Just this month, after less that 5 months, Lyft has given up the ghost on the Lyft Carpool service. Just as they exit, in comes Waze.
Why Waze might work
Unlike Uber and Lyft drivers who are driving for their job, a Waze driver has a different objective. Some of the reasons a person might bring along a passenger with Waze include:
- a way to meet interesting people,
- to earn a few extra bucks,
- to be environmentally-friendly, or
- to have access to the car-pool lane.
If Waze promotes or limits the service to a 1-to-1 driver-to-passenger ratio, the hassles as experienced by UberPool riders and drivers may be minimized. They will have to overcome the issues that Lyft Carpool ran into.
The game changes with self-driving cars
The Waze Carpool project is a conservative entry into the ride-sharing space. Uber should feel little pain from the Waze offering as it stands today. The peace and harmony between Waze and Uber may come to an abrupt end when self-driving cars hit the road in mass. This cute Waze pilot is a precurser to the main event between the two “most likely to succeed” in the self-driving landgrab. Waze Carpool is a way for Alphabet to promote the service as an altruistic service. Waze Carpool is an example of their ongoing effort to reduce traffic and pollution, while increasing meaningful human connections. Eventually self-driving cars will replace drivers. These vehicles will be available on-demand 24/7 for a compelling rate for any ride of any distance from anywhere. Sound familiar?
Until self-driving cars get the green light, this Waze project will not impede Uber’s massive growth and dominance. When self-driving cars are unleashed, this likely collision of tech giants is promissing to be one of the epic battles in the history of business. Gentlemen and women, start your engines. Passengers, buckle up. Don’t let this slow roll-out lull you to sleep, it could get interesting.
