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Uber Will Invest $500M to Develop Google-Like Map (GOOGL)

Investopedia logoInvestopedia 02-08-2016 Ashley Eneriz
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Uber has relied on Google for many years, first as an investor and second for the tech-giant’s innovative mapping technology. Now the ride-sharing company wants to cut its ties with Google.

Uber just raised $3.5 billion in June from Saudi Arabia’s sovereign wealth fund. The company plans to pour that money into smarter, Uber-specific technology, including a $500 million investment to create a new mapping system.

Why Replace a Great Mapping Tool?

What most investors and customers might be wondering is why the change? Google Maps is highly accurate and already developed. So why reinvent the wheel? Uber admits that they would be nowhere if Google Maps did not already exist.

Brian McClendon, Uber’s current mapping guru and former head of Google Maps, explains in a recent blog post, “Existing maps are a good starting point, but some information isn’t that relevant to Uber, like ocean topography. There are other things we need to know a lot more about, like traffic patterns and precise pickup and dropoff locations. Moreover, we need to be able to provide a seamless experience in parts of the world where there aren’t detailed maps—or street signs.”

Uber’s Other Issues With Google

Uber might also be ditching their reliance on Google for other reasons too. Recently, Google raised its fees to use Google Maps, which cuts right into Uber’s bottom line. Google is now looking to compete with Uber as both companies race to put autonomous vehicles in the consumer market.

Google’s driverless cars have already self-driven more than 1.5 million miles. McClendon hints at Uber’s progress with self-driving cars in his post, “Over the past decade mapping innovation has disrupted industries and changed daily life in ways I couldn’t have imagined when I started. That progress will only accelerate in the coming years especially with technologies like self-driving cars.”

Uber’s $500 million investment in mapping technology will propel them past competitors and give them the edge, since Uber’s self-created map will allow them to operate more efficiently and in more less-developed areas.

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