Google Maps Must Become a Transportation Aggregator

The users, technology, investments, and product-market fit are there. Mobility aggregation is the next step.

Onstage at the 2018 Code Conference, Dara Khosrowshahi described his ambitions to make Uber the world’s premier mobility aggregator. It was a compelling pitch, especially given his background as the ex-CEO of Expedia, a successful and expanding travel aggregator.

Dara Khosrowshahi at the 2018 Code Conference

When asked what forms of mobility he wanted on Uber’s network, he said, “any transportation, totally frictionless, real-time.”. This could include “bikes, perhaps scooters” (teasing an announcement to be made weeks later). “I want to get the bus network on. I want to get the BART, or the metro, etc. onto Uber. So, any way for you to get from point A to B.” He wants this to include autonomous vehicles, developed by anyone, from GM to Waymo (although the prospect of detente between Uber and Waymo does not seem imminent).

The strategy makes perfect sense. Uber is looking to transition from selling its own mobility services, to everyone’s (taking a healthy slice of the top line). This must include third-parties, naturally, as Khosrowshahi explained.

Just like Amazon sells third-party goods, we are going to also offer third-party transportation services. So, we want to kind of be the Amazon for transportation, and we want to offer the BART as an alternative. There’s a company called Masabi that is connecting Metro, etc., into a payment system. So we want you to be able to say, “Should I take the BART? Should I take a bike? Should I take an Uber?” All of it to be real-time information, all of it to be optimized for you, and all of it to be done with the push of a button.

Uber cannot, and does not want to, own a stake in every single transportation alternative, but does want to become an integrated front-end for mobility, allowing users to seamlessly choose between a variety of transportation modes, taking the one that is best for them, and paying Uber for the convenience and management of the experience (selection, payment, administration, etc.). It opens up new markets, it protects their core ride-sharing business from being disrupted from the outside (but from within instead, as is already happening), and presents consumers with the best possible value proposition and experience.

Today, selling the optimal mobility option is a fractured experience, for two major reasons. First, there have never been more ways of getting around. You have all existing mobility options (buses, taxis, trains, metros, etc.), as well as all new ones (ride-sharing, pooled car-sharing, scooters, bikes, on-demand buses, short-term car rentals, etc.). Consumer choice for mobility (in cities) is at an all-time high, and more choice means more difficulty in decision-making.

Just a few of your options

Second, comparisons are difficult. Your decision parameters could include price, convenience, ETA, the weather, and more. Deciding on the basis of all of these factors is complex, but additionally so because the information you need to make your decision is siloed and available on different platforms/applications/websites (and sometimes, not available on the web at all!).

This problem screams aggregation as its solution. Uber, or any of the major ride-sharing companies, are primed for this transition (and are already making changes to their product to accommodate this shift). They enjoy large user-bases, they are literally synonymous with urban mobility (“let’s just Uber there”), have hundreds of millions of payment details that can be used to pay for mobility services beyond car-sharing, and provide enormous, well-designed platforms for mobility company to sell their services on. But, with this transition, Uber and the rest invite new competition, where one company in particular is extremely well-positioned to dominate the future of mobility, if they so choose.

Just Google It

Google Maps is exceptionally well-positioned to enter the mobility fray and compete as an aggregator. It already has nearly every functional piece it needs to start competing — from usage, to user interface, to payments, to supply.

Google Maps is, for a billion people, the interface for their mobility needs. Whether it’s determining how far away a place is, to looking for accurate cycling routes, Google Maps is how more than half of US smartphone users satisfy their navigation and planning needs. So, the first big advantage it has is owning the end-user relationship with an enormous customer base. Owning the end-user relationship is the key in any aggregation strategy.

Second, it is well positioned in a user’s transportation lifecycle: most people use it to plan, scope, and map their options and routes, and then decide on the right mobility option to satisfy their needs. Google Maps today allows users to i) identify locations and get relevant information (reviews, hours, photos, etc.) about those locations, and ii) accurate, turn-by-turn directions for a variety of transportation modes, sometimes combining the two. Currently, it gives routing if you may want to go to your destination by foot, by car, by bicycle, by public transportation, and most interestingly, by ride-sharing (more on that later). So, it’s second big advantage is a user interface is already set up in a way that could handle this sort of interaction seamlessly.

Why is that second point so critical? To compete as a mobility aggregator, there is going to be enormous value in making multi-modal transportation seamless, efficient, and attractive. Transportation alternatives, on most interfaces, are modularized. You either take the bus, or the metro, or a Lyft, or a bike. Having every option in one interface is valuable, but combining options is more valuable, because that unlocks mobility options that were previously unmanageably difficult for consumers to select.

Finally, Alphabet, the parent company that owns Google Maps, has in multiple capacities invested in a number of different mobility services that can create initial supply of mobility options for its users. In order to actually offer any transportation options, those options need to willingly expose themselves on the platform. What better way to jumpstart that process than by using Google Maps as a distribution channel for Lime, which they invested in via GV and Alphabet. Or for Lyfts, part of the Capital G portfolio. Or Indonesia’s Go-Jek, and so on.

How They Could Get There

Google Maps, rising above the rest (literally, if Larry Page gets his way)

On a business level, Google would need to go out into the market, and convince mobility providers to sign up to be aggregated onto their service. It’s easy to see why this may be controversial, and why this could engender resistance. Each different mobility provider will probably react to the proposal differently.

For public transport providers, spooked by the aggression and historical negligence towards local rules and regulations on the part of the ride-sharers, Google Maps could be a friendly and acceptable company to partner up with, as many already have in providing it with up-to-date information and schedules for their mobility offerings. Public transportation providers usually have terrible, broken websites, confusing directions, and messy online and physical interfaces. Why not let Google do what Google does best, which is create excellent, scaled consumer interfaces for vast amounts of information?

For new entrants to the mobility space, from bikes to scooters, there would be a mixed reaction. For the more dominant ones (e.g. Bird and Lime), there would be resistance to being (further) commoditized and batched into one platform. For new entrants, the service would be a God-send. Imagine setting up your business, deploying your product on Google Maps, and without needing a single person to install your app, having access to a billion potential customers. For anyone starting such a service, their addressable market would explode. In the long-run, the potential success of such companies on the platform would force the more dominant ones in, who would not want to miss out on the opportunity to access as many customers as their now-stronger competitors.

The toughest stakeholder to get on the platform would be any of the ride-sharing companies. Yes, Uber and Lyft have advertised rides on Google maps in the past (although, Uber is discontinuing booking rides in the app itself), but have limited the experience by retaining the booking functionality and only showing a price estimate. By entering the platform, what they could gain in terms of market size, they would lose in terms of brand differentiation, and risk even greater commodification than exists today (which is perhaps the most important business challenge the major players face today).

Estimates for Uber and Lyft, and a request button that takes you out of the app

It would also be difficult for Google Maps to argue that the service would not cannibalize their existing offerings, although certainly the new platform would help create trip sales that would otherwise not have been realized. And, for the ones that harbor their own ambitions to become mobility aggregators, this collaboration would be a non-starter. But, this would be a prime opportunity for any new entrant in the space to jump at the opportunity, or for a secondary or tertiary player. Getting this right would be the most difficult part of establishing this entire enterprise, presumably.

Once the business side is settled, the product side comes into focus. Google Maps offers a restrained version of mobility aggregation (including ride-hailing estimates), but to become a true aggregator, they would need to go a few steps further than they do today, on a product level.

  1. First and foremost, it would demand Google Maps to be the venue where payments are actually made for the mobility service offered. Creating a seamless experience would demand that the payment process (one of Uber and Lyft’s most excellent innovations) be handled in one place and not be fractured.
  2. Second, bookings would need to be handled in the app itself. Today, Google Maps shows estimates for Uber and Lyft for any route where ride-sharing is feasible. But, to actually book either service, exiting the app is necessary. Additionally, the feature offers just estimates, ranges of prices, which aren’t especially useful when both services offer purely upfront pricing to begin with (which makes it strange to even offer a range to begin with!).
  3. Third, users would need to be able to configure what sorts of multi-modal offerings they prefer, and multi-modal offerings would need to be provided by the app as a default. Observing what choices individuals make over time, Google Maps should be able to ascertain consumer preferences by modality, price, time and more. This is, of course, what they do best, and will provide optimized selections on every marginal return a user makes to the application.

Implications for the Mobility Space

The implications of these innovations would be enormous, both for mobility, and for Google.

Thinking about mobility first, the benefits of delivering multi-modal transportation are obvious. Getting from A to B in a Lyft could take too much time given traffic. Or it could be too expensive. Having an app suggest a quick bike ride to a Lyft that’s waiting for you past the congestion is valuable for a consumer. Taking a train that’s 20 minutes away by walk can become a lot more attractive if the software pairs it with a five minute Bird ride. A Jump bike from home to a Caltrain to an Uber Pool to work, with one bundled payment, could make it feasible for someone to take a job they once thought they’d have to move for. And so on and so forth.

Automating the decision-making for multi-modal transportation options would be the catalytic innovation that would make it possible for consumers to engage in it at scale. Automation would reduce consumer friction for making multi-modal journeys. The enormous complexity in calculating and evaluating these sorts of trips cannot be understated — from personal experience, making transportation decisions based on just a couple of modes can lead to cognitive overload, to say nothing of making decisions between four or five. Additionally, it could actually even improve the mobility experience writ large — would you prefer to take that Lyft in congestion for a 25 minute journey, or hope on a Ofo bike to a Lyft in a less busy area, reducing the journey time to 15 minutes, all with one cheaper bundled payment (cheaper because the majority of the most expensive part of the journey, the drive, is substituted by a far, far less expensive alternative). Some more advantages of floating and multimodal transportation can be found here.

On the business side, Google would be able to climb up a value chain in a field it is dominant, but not monetizing to its full potential. So much of Alphabet’s value rests on their ownership of multiple(!) platforms that have a billion users or more. This would be a way to take a slice of the top line of all transit, all the while improving the user experience around it as well. The implication for ride-sharing companies as a whole is mixed. The dominant ones would be adversely affected through the new competition the aggregator would prompt, as well as the increased commodification this would auger (where price and ETA truly would become the only differentiators). Were this to become a reality, there would surely be a gush of venture capital flowing to new, platform-native entrants.

Uber and Lyft, in a match of undifferentiated, commodified equals, where Google Maps owns the ring

However, it isn’t a stretch to imagine how these services could benefit from the larger market the aggregator would deliver, as well as from multi-modality making their core offering both cheaper and more appealing (a similar argument could be made that the core ride-sharing business could easily become cannibalized by the cheaper, floating alternatives). And, for other mobility providers, like the scooter and bike providers, it could play out similarly. But, for those providers, there would still be room for stand-alone apps even in a world where Google Maps is the aggregator. When someone finds a Lime bike in front of their house, right as they are about to go to the supermarket six blocks away, they could still very well reach for the Lime app for the quickest and simplest user experience.

The future of this aggregation approach has multiple possible end-states. Once scenario is where Google dominates transportation — it creates a total commodification of transport alternatives, and squeezes margin from undifferentiated, competing alternatives as the demand aggregator. Or it could be one where Google enables different services to grow and prosper, essentially choosing winners, and taking a small but meaningful slice of the value created. And, this doesn’t even consider what happens in a world of full autonomous vehicles, which Google is obviously heavily invested in, and could easily deploy via the platform (although, given that Waymo is currently hiring for engineers and designers for its mobile app, a go-to-market using Google Maps seems unlikely).

Khosrowshahi described his ambition as wanting to provide “any transportation, totally frictionless, [in] real-time”. It’s a powerful, compelling future, and one that Uber is uniquely positioned to achieve. But another rival, one less obvious than the Lyft’s or Didi’s of the world, is positioned to that very goal, hiding in plain sight.