Google readies Tel Aviv beta for ride-sharing via Waze

In a bid to monetize traffic navigation app Waze, Google is set to roll out a new service that will enable Waze users to “Uberize” their travel by picking up passengers who are going their way for a small fee.

The service, called RideWith, will be initially rolled out in Tel Aviv on a trial basis and could later be rolled out worldwide.

With RideShare, Google will be joining a growing number of start-ups – several of them Israeli – that are developing ride-sharing apps and platforms. And while Google and Waze “obviously have the user base to become a major force in the ride-sharing market, their presence will help all the ride-sharing apps by raising consciousness and popularizing the concept,” said Shay Zluf, of Israeli ride-sharing startup La’Zooz.

The new service, which Google is set to announce this week according to a report in business daily TheMarker, will utilize an app called RideShare that will be available to Israeli drivers in the Google Play store (initially, there will only be an Android version). Users will register the addresses of the routes they commonly drive, like from home to work. Once they’ve done so, the new app will interface with Waze, which as usual will recommend the fastest route between the two destinations and check if there are RideShare users along the way who are looking for a ride.

Alerts will be sent to both the driver and the prospective passenger, with drivers being told how far out of their way they would have to go to pick up someone and passengers informed about the route the driver will take and when they can expect to arrive at their destination. If both are agreeable, the app will enable them to contact each other via text messages. Although drivers can, if they wish, transport passengers for free, it’s assumed they will want to get paid — and the app will recommend mileage payments based on a formula generally used by Israeli corporations to gauge how much they are spending on company car usage by employees. Payment will be made via the app, with Google taking a percentage of the price.

Google did not respond to requests for information, while Waze said in a statement to Reuters that the plan would be a “small, private beta test.” Drivers, according to the Reuters report, will be limited to two rides a day, in order to prevent drivers from earning a profit as they could with Uber, the ride-sharing service that has become popular in many cities in the United States.

Google bought Waze in 2013 for about a billion dollars, and despite rumors over the past two years — that Waze would be integrated into Google Maps, or that the navigation app would be inundated with Google-style ads — little has changed in Waze’s functionality or features. According to early Israeli investors in Waze, Google may have been attracted to the app — as were the investors — not because of its traffic navigation capabilities but because of the way it developed maps.

According to Yahal Zilka, a partner and cofounder of Magma Venture Partners, “there are only a few companies in the world that develop maps, and most of them are worth billions.” Netherlands-based Tele Atlas, for example, was bought by navigation system manufacturer TomTom in 2008 for 2.9 billion euros — after that company won a bidding war with Garmin. In 2007, Nokia bought Chicago-based Navteq for $8.1 billion.

The reason these companies sold for so much is because map data is the basis for all geolocation apps. “Without maps none of the location apps would work very well,” said Zilka. In addition, a lot of work went into developing the maps; companies had armies of cartographers and programmers who input the data into the map system, kept it updated, developed turn-by-turn instruction sets that dedicated navigation devices from Tomtom and Garmin rely on.

Waze does not have — or need — that army of cartographers, because the app updates maps based on the reports it gets from drivers. If a driver comes across a new highway or a new exit, for example, Waze will record that and check whether other drivers are using it. If they are, the map will be updated. In this sense, drivers essentially replace cartographers.

That Waze had come up with a way to essentially do the updating work for free, based on its crowdsourcing approach, was the truly revolutionary component of the app, said Zilka. Even better was the programming to make the map navigable automatically — determining the ideal route based on the up-to-date map information and the traffic info. As a company that uses maps extensively, said Zilka, Google may have decided to spend so much on Waze in order to integrate its crowdsourced mapping technology into other apps.

However, that would not keep the company from trying to make money off Waze’s traffic navigation capabilities as well — hence the decision to implement RideShare, according to industry experts quoted in the Israeli media.

Shay Zluf (Courtesy)

Those reports left some questions unanswered — such as how far drivers will be asked to go out of their way to pick up passengers. Since Waze usually relies on highways to get people to and from their destinations as quickly as possible, the eligible candidates would presumably live or be picked up within a few minutes of highway exits — a dicey proposition in Tel Aviv, where traffic on local streets usually crawls along even during “quiet” traffic times (and presumably most people going to or from work would be looking for rides with RideShare during rush hour, when traffic is often at a standstill).

Also unclear is how the app would work in real time. Ideally, a ride-sharing arrangement would be set up in advance, possibly the night before prospective drivers and passengers are planning their trip. However, Waze determines the ideal route for drivers in real time, checking the traffic situation as it gets updates from its user base on the road — meaning that a passenger may no longer be on the “right” route, which has changed in response to traffic. If, on the other hand, Waze would not recommend a route change in order to accommodate the passenger, it would lose some of its effectiveness as an app, because the route chosen might no longer be the fastest.

Zluf, whose La’Zooz is one of several Israeli-developed ride-sharing apps that are already in use, is sure that Google and Waze will work out whatever bugs they find during the trial period, but in the meantime, apps like his will get more exposure. Users download the La’Zooz app, and enroll in its ride-sharing network. When enough people in an area join (based on studies, Zluf believes that critical mass is be achieved when roughly 3% of drivers in an area enroll), users are able to “hail” a ride with a member of the network who is driving their way. And instead of paying with cash, passengers pay with tokens, which are credited to drivers’ accounts.

“On the one hand, using a service like this from Google and Waze guarantees a large user base, since so many people are already using Waze,” said Zluf. “On the other hand, users are aware that Google and Waze will use the information they gather using this system to sell them more stuff, or otherwise monetize their presence on the road. People are used to that, but our app enables ride-sharing without gathering the information about a trip or a driver on a central server. With La’Zooz, the communication, computation, matching, and money transfer is all done on a user’s device,” said Zluf.

Despite the competition — La’Zooz is also running a beta test of its service in Tel Aviv — Zluf welcomes Google to the ride-sharing economy. “It’s good for users, it’s good for Google and Waze, for the environment, and for us as well,” he said. “The more people are aware of the options and opportunities provided by ride-sharing, the better for everyone.”