Thursday, September 15, 2016

Google Maps Links to Lyft in Jab at Uber

In a recent article that I read in the Wall Street Journal, I began to realize the amount of competition that is occurring in ride sharing app market. I felt like this article really hit close to home because Uber and Lyft is essential when you go to school in a city. Up until now Uber has had exclusive rights to Google's Maps technology, however Google has now made the technology available to rival competitors Lyft and Gett. It might not sound that impressive but Google Maps is a front running application for mapping and directions. Uber owned exclusive rights to having the right to enable their taxi hailing application on Google Maps application. Now competitors Lyft and Gett have joined the competition on Google Maps to even out the playing field. Google Maps users will now have the ability to choose between different taxi services directly on the map application. It will provide customers with the cheapest fares on this convenient application.

I felt this was a noteworthy article to share with you because it deals with the complex algorithms that go into Google Maps. It doesn't directly talk about the algorithms and technology however it explains the business side of this deal. Google is adding healthy competition to it's Maps application and is providing taxi services an equal opportunity for profit. This article immediately caught my attention because I take taxis very often to get from place to place in Baltimore. It was also very informative because before this I didn't even now calling a taxi from google maps was an option. I usually just use my Lyft or Uber applications, and then pick which service to use based on price. Now this will save me time and make it more convenient to find the best price and shortest time through this application.

Besides the fact that I use these applications on a day to day basis the article also drew my attention because it involves the business side of Google. With the addition of Lyft and Gett to Google's Map application this provides Google with another way to increase their net profits. What is surprising is that Google was an original investor in Uber but has quickly seen the increasing competition in the ride sharing application market. As a finance major I am fascinated with ways that a company can increase profits in any way. By adding these two companies to their application it is eliminating Ubers competitive advantage in time and efficiency. This is huge for competitors Lyft and Gett, because Lyft is arguably a cheaper option that Uber. Lyft offers promotional offers such as a free $15 ride when adding friends to the application. Lyft also offers cheaper fares when you spend a certain amount of money with the application. The tech giant, Google has just made millions of people's lives much easier with the addition of these two companies. Not only is it easier but it will help everyone save a few dollars.

- Christopher O'Neill

Google Maps Links to Lyft in Jab at Uber
Jack Nicas
http://www.wsj.com/articles/google-maps-links-to-lyft-in-jab-at-uber-1473358852?mod=ST1

4 comments:

  1. After reading Chris’s article of Uber’s competitor, Lyft, Uber is starting to lose its edge over Lyft. In this blog, Chris explained very elegantly that Lyft’s and Gett’s applications have been added to Google Maps’ portfolio. What do we make of this? Since Google excludes Uber in its applications, Google is somehow is increasing its net profits. I found this somewhat surprising because Google’s service charges approximately 54 cents per mile while Uber charges $1.15. In addition, Google Maps’ operating system is more familiar to the user because “they know your schedule and can pre-order your car for you” (Forbes).
    I just wanted to address how Google Maps, Lyft, and Uber correlate with our Database Management course. The Forbes article discusses that Google Maps will differentiate itself from Uber by receiving the feedback from the users of their service, instead of screening the drivers. I am not sure, which is more time consuming to do, but I must disagree with what Google is doing. By screening your employees (the drivers), you can complete the process in a couple of steps. On the other hand, using customer feedback is valid but it takes time and resources to attend to. There are some positive aspects of the addition of Lyft to Google Maps. Google Maps is personalizing your profile for you, which means it saves you time. For instance, Uber takes a while to order an Uber Pool, but Google Maps/ Lyft have already set up a user interface for you and you are well underway to your destination. In other words, Google Maps and Lyft has saved the effort and time for you that you don’t need to think in an instance!

    Google Maps Forbes Article: http://www.forbes.com/sites/jaclyntrop/2016/08/31/google-is-gearing-up-to-disrupt-uber/#120cbcd738e0

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  2. I thought this post by Chris was very interesting. I am a frequent Uber user, have honestly never tried Lyft, and have never even heard of Gett. I have only had such pleasant experiences with Uber that I have not even thought about branching out. After reading this article I really believe I may have to try this out.
    I do have a question as to why Google made this move to stop their exclusive agreement with Uber. I do wonder if it’s because they began to notice that with the growing competition that they felt Uber was not the safe bet anymore, or simply because they can add more traffic and make more money on their app. Adding the healthy competition to their Maps application is a very smart idea though. The amount of traffic they can bring to that app will only increase by this move. There’s no argument that Uber’s competition is growing, but are the other competitors that serious of a threat to Uber? I would love to see the data on the changes in market share for Uber and the competitors for the past five years.
    In terms of thinking like a business mind this is just another power move by Google. They are constantly thinking of new ways to improve profits and just have all of society rely on them. The title of the article is “Google Maps links to Lyft in jab at Uber”. Uber is a huge company, and is used all over the world, but Google is Google and they can and will take shots at anyone they wish. Google started off as an original investor in Uber and now they are using Uber’s competitors to make their own app even better. Not only is this better for Google, but this is even better for us consumers. To have the option of comparing and using three different car services is amazing. We can easily see which service will be cheaper/ faster. Eventually using Google Maps to hail a car service will take off (because almost everything Google does takes off) and more consumers will use this to find rides. This will cause the companies to lower rates even by just a hair in order to be more attractive to customers. It’s like having two different gas stations across the street from one another. One gas station is always one cent cheaper just to have the appearance of being the better option. This will have the same effect on these car services. Now we can simply open 1 app and compare rides, instead of opening up 3. This just shows that people who work at Google are brilliant minds who are always two steps ahead of everyone else.

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  3. Christopher chose a great and very relevant article for college students who are constantly trying to find the cheapest and quickest way to get from point A to B. A few years ago, taxis were the only option that came to mind when trying to get downtown. Then, however, Uber was created and after that followers such as Lyft were formed as well. Today, there are many different modes of transportation readily available to college students, all through the push of a few buttons in someone’s smartphone.

    Christopher brought up a great point when he explained that Google is doing the right thing by adding healthy competition by including Lyft and Gett on their mapping application. Taking his point one step further, I believe it was necessary and only right for Google to add the other ride sharing apps, Lyft and Gett. Promoting only one company on their universal maps is unfair and is encouraging a monopoly in my opinion. If someone unfamiliar with the various apps were to go on Google maps to request a ride, they would only see Uber and automatically assume that is the only option which is taking advantage of the customer in my opinion.

    While I agree with Google’s choice to add Lyft and Gett as transportation options in their mapping application, this surprised me because Google invested $258 million in Uber back in 2013. I am surprised that Uber would not want to renew this deal with Google, which leads me to wonder if Google was the one to stray from Uber to want to include other ride sharing choices in addition to Uber on their own app. My next question would be, “How does Uber feel about this?” Unfortunately, Uber did not have a comment on the addition of Lyft and Gett, but I can only assume they are unhappy with Google’s choice as this is bad for their own business.

    Another reason I think Google’s addition is such a good idea is because of the personal benefit it gives me, and other users like myself. Christopher stated that by adding the two other ride sharing companies “Not only is it easier but it will help everyone save a few dollars”. Being able to see the prices compared in real time is a game changer in my opinion. This promotes competition in the marketplace, which is the opposite of what Google was doing by only having Uber as an option for many years. Being able to see the fairs in real time next to each other is beneficial for the consumer, and will encourage the ride sharing apps to lower prices as the consumer will logically choose the option with the cheapest fair.

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  4. After hearing about the new additions to Google Maps I immediately thought about what would happen to Uber. As Christopher said, we are at a school that is constantly using services like Uber but are always looking for the cheaper option. Google making the technology open to Lyft and Gett has raised the competition even more. Consumers are always looking for convenance and by using the Google Maps app to determine which service is faster will take a toll on Uber. Although the average wait times are not much of a difference between Lyft and Uber, Lyft has an average wait time of 4 minutes and 10 seconds while Ubers is 4 minutes and 16 seconds. This difference of 6 seconds may not seem like much but to the average rider they will always choose the faster time and root.
    While Uber may be afraid that this technology being open to their competitors will harm them, they have other factors to compete with. The average base price for an uber x is $2.20 and Lyft is $2.25.The average rate per mile is $1.30 for Uber and $1.35 for Lyft. These small differences are what can still set Uber apart from competitors. Something that I have read recently is how Uber is creating a new app. This app will allow riders share the contacts of who they are meeting and use their location as the destination. Uber is now offering the ability to take shortcuts during the ride based on the time of day. Once you have used this shortcut, you will have the option to store that shortcut and use it every time you are going to that destination. When a passenger is deciding between which service to take their immediate decisions are based on convenance and cost. If Uber can keep their fares from exceeding those of Lyft/Gett and get passengers to their destination the fastest, they will still be able to compete.

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