Alphabet’s carpooling program in San Francisco offers rides at cheaper rates
Google’s ride-sharing service uses the Waze app to connect with fellow commuters.Photo: Linda Davidson/The Washington Post/Getty Images
Aug. 30, 2016 3:10 p.m. ET
Google is moving onto Uber Technologies Inc.’s turf with a ride-sharing service to help San Francisco commuters join carpools, a person familiar with the matter said, jumping into a booming but fiercely competitive market.
Google, a unit of Alphabet Inc., began a pilot program around its California headquarters in May that enables several thousand area workers at specific firms to use the Waze app to connect with fellow commuters. It plans to open the program to all San Francisco-area Waze users this fall, the person said. Waze, which Google acquired in 2013, offers real-time driving directions based on information from other drivers.
Unlike Uber and its crosstown San Francisco rival Lyft Inc., which each largely operate as on-demand taxi businesses, Waze wants to connect riders with drivers who are already headed in the same direction. The company has said it aims to make fares low enough to discourage drivers from operating as taxi drivers. Waze’s current pilot program charges riders at most 54 cents a mile—less than most Uber and Lyft rides—and, for now, Google doesn’t take a fee.
The company says it doesn’t believe Waze drivers’ income is taxable because it considers payments through its service effectively as money for gas.
Google’s push into ride-sharing could portend a clash with Uber, a seven-year-old private firm valued at roughly $68 billion that largely invented the concept of summoning a car with a smartphone app.