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Uber signs a 4-year deal with Google Maps — it's a "friends with benefits" relationship

Snacks / Monday, July 20, 2020

America runs on Dunkin'... But Uber runs on Google Maps. We don't think much about Uber's underlying GPS while drinking out of a plastic bottle and asking for the AUX cord. However, Uber has Google Maps built into it. Without Google, Uber can't direct drivers, give ETAs, and stop you from asking 'how much longer.' That's why:

  • Uber just inked a 4-year agreement with the tech giant, giving it access to Google Maps for its rides and Eats deliveries.
  • Why Google? Uber said in its IPO paperwork “We do not believe that an alternative mapping solution exists that can provide the global functionality that we require." Apple Maps, burned.
  • From 2016 to 2018, Uber paid Google $58M to use its Maps service. We don't know how big the latest deal is.

More like Pool pricing... $58M is a relatively small sum to pay for a service that essentially powers your app. Especially when Uber did $11B in sales in 2018, and Google did $39B (in just the 4th quarter). Sure, Google's happy with billions of riders subconsciously accessing its Maps. However, it turns out Google and Uber's relationship isn't casual (it's complicated):

  • Google has a 5.2% stake in Uber: Google's venture arm invested $258M in 2013, back when Uber was a private startup. That stake is now worth over 10X more.
  • Mo Equity Mo Partnerships: From 2016-2018, Uber spent $631M for Google ad services.

Big Tech is the "Silent Server" for the digital economy... The true power lies in the utilities you use, but don't necessarily see. Amazon's cloud service, AWS, accounts for nearly 13% of its revenue and also powers the operations of millions of companies from Netflix to Slack to Shell. Google Maps, which runs on Google Cloud, (almost) invisibly powers Uber's operations — and it's expected to deliver Google nearly $5B this year. Tech giants' servers perform essential computing for the apps you love. So they can charge rent that you don't see, but definitely pay for.

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