Google purchased Waze for $1.13 billion in 2013 — making waves in Israel, as Waze was that country’s first consumer app to hit the billion-dollar mark. After trials in Israel and San Francisco, Google is reportedly ready to roll out the new ride-sharing app in select cities across the U.S. and Latin America.
Waze will work differently from Uber, Lyft and other ride-sharing apps. Its largest rivals in the U.S. once started out as “ride-sharing” services, but rapidly morphed into the on-demand taxicab services as users appreciated the cheaper prices and real-time monitoring. Gett, another Israeli-founded transportation app, works in most cities as a digital dispatcher for local taxi companies.
But Waze will work as an online carpool tool for drivers who want to make some spare change on their commute. If someone wants to add some commuters to a ride, Waze will alert the driver to potential passengers along that route.
The Journal noted that the prices are expected to be about a third of the fares charged by Uber and Lyft. And the pricing is designed to discourage drivers from relying on Waze as their main or sole income: For now, drivers will be compensated 54 cents a mile — which is the current Internal Revenue Service mileage reimbursement rate.
Waze has already built a steady fan following for its development of traffic maps using crowd-sourced data. As outlined in Fortune, for example, the app helps Los Angeles commuters avoid intersections with congested left turns, one bane of driving within America’s second-largest city. And the service built its carpooling chops by working with large companies to match riders with workers who follow a similar path to work.
The question Waze faces is whether it can compete and lure customers away from companies and services that are already established.
While Waze promises a far cheaper commute than Uber or Lyft, those companies’ car pool services in the Bay Area charge anywhere from $10 to $13 to drive from downtown Oakland to San Francisco’s Financial District – not a bad price when considering the Bay Bridge toll sets solo drivers back $6. And despite the fact that “Casual Carpool” drivers no longer win a toll-free drive across the Bay Bridge, this underground commuting scheme still has its diehard followers.
For those drivers who have the means to commute into the center of larger (and expensive) U.S. cities, scoring a 50 cents or so for each mile may not be enough of a financial incentive.
Nevertheless, Google’s bullishness on Waze is indicative of America’s creaky public transportation system. In the Bay Area, BART, now approaching a half-century in age, has long been beset by problems due to its aging infrastructure – which the rail system acknowledged last year after a barrage of Twitter rants from frustrated and infuriated commuters.
And while the current U.S. president has promised up to a trillion dollars in infrastructure improvements, the evidence suggests that public transportation is not high on the list of the administration’s priorities. With that said, Waze can probably find plenty of room for growth in the burgeoning alternative transportation market.
Image credit: Allan J. Cronin/Wiki Commons