Google, Driverless Cars and the “Gooberification” of Everything

This post “Google, Driverless Cars and the “Gooberification” of Everything” originally appeared in the Huffington Post.

Google is the most dominant platform in the world.

It is a pure platform company that makes almost all of its revenue from facilitating exchanges and interactions between its users. Google’s main revenue driver, search advertising, works by connecting advertisers with consumers. And with Android, Google connects software developers with consumers through the Play Store. In fact, Google has made a significant investment in just about every type of platform.

#Google has made a significant investment in every type of platform | via @Applico #PlatformInnovation pic.twitter.com/21pT5Lv93P

— Applico (@Applico) February 20, 2015

Almost all of these platforms enable Google to improve its core business: collecting data on users and using that to serve them ads.

But the last platform frontier for Google is a services marketplace, where uber-startups Uber and Airbnb reign supreme. Uber recently made headlines when it unveiled a partnership with Carnegie Mellon University to fund research for autonomous cars and proprietary mapping technology. This announcement could turn the formerly cozy Google and Uber relationship into full-blown competition. If Uber’s investment in Carnegie Mellon pays off, it would allow the company to be less dependent on Google Maps and to directly compete with Google’s autonomous car program.

And apparently, Google already sees the potential threat. News leaked last week that Google is in the early stages of testing its own Uber competitor. While Google’s autonomous car aspirations are well-documented, its interest in developing a ride-hailing service app would be its first foray into a services marketplace platform. The details on the intent and scope of Google’s program are still murky, and driverless cars are still years away from reaching mainstream consumers. But it’s easy to see why Google would want to own the future of transportation.

Google’s Blind Spots

Google makes 90% of its revenue selling text ads for every marketable product or service on earth. Search was the backbone of the consumer Internet, helping to organize traffic and information. All of Google’s core products – Gmail, Android, Maps – are given away essentially for free so that the company can extend its access to information. In essence, Google expands its revenue by “expanding the pie” for the Internet. Google wanted to be the logistics platform of a digital world, and for the most part it has succeeded. Where it’s failed is when it comes up against walled gardens like Facebook, which has reams of user data that Google’s crawlers can’t access. Enter Google’s largely failed effort to establish a social network, Google +.

Where does Uber come into all of this? For now, Uber is just a ride-hailing app, but as some of its experiments (like messenger service Uber Rush) have shown, its mission is to become the logistics platform of a connected world. If Uber’s dream becomes reality, Google could be faced with another walled garden keeping it from accessing information it wants. Google has continuously tried to expand its reach throughout the desktop and mobile Internet. So when the Internet of Things starts to come to life, I’d expect Google to try to do the same. Owning a key transportation platform through driverless cars would be one way for it to accomplish this.

The Gooberfication of Everything

So how could Google take on Uber? If Google can successfully bring autonomous cars to market, it could create what many have jokingly called “Goober,” a services marketplace similar to Uber that’s powered by self-driving cars. Compared to Uber today, Goober’s transportation prices would be substantially lower. And even worse for Uber, Google wouldn’t even need to make money from rides. Currently, Uber makes money by taking a cut of each transaction. But Google wouldn’t need to. Instead, it could offer rides at-cost and make money from its captive audience by collecting data and showing them Google-run advertising.

In this scenario, Google doesn’t even need to own the cars. A car owner could be dropped off at work and then their car could spend the day picking up and dropping off other passengers on Goober. The car owner would keep all the money they make from giving rides and Google would keep the advertising revenue and data. Everyone wins.

The more data Google can collect, the better it can target ads and the more advertisers will be willing to spend on Google advertising. By getting more users unto its platform through expand the pie initiatives like an Uber competitor, Google can continue to finely tune its big-data engine and position itself to be a central part of the Internet of Things. Game on, Uber.

Filed under: Platform Innovation | Topics: Google, platform innovation, Uber