Google’s Waze is making a big, nationwide bet on carpooling

Google’s Waze is making a big, nationwide bet on carpooling

By Andrew J. Hawkins | The Verge | October 10, 2018 |

Photo by Amelia Holowaty Krales / The Verge

For many drivers, Waze is the go-to app for circumnavigating pesky traffic jams. Now, the Alphabet-owned company is making a risky move into ride-hailing — or, more specifically, carpooling. On Wednesday, Waze announced the nationwide rollout of Waze Carpool, a dedicated app that lets drivers offer rides to people who are traveling on a similar route.

First launched in the Bay Area in 2016, Waze Carpool has since expanded to five additional states in the US as well as Waze’s country of origin, Israel. The company says it wants to leverage its “superior routing technology” to help commuters fill empty seats in their cars and, in the process, hopefully reduce the number of cars on the road. And with a community of 100 million active monthly users worldwide, Waze Carpool has big ambitions about its impact on daily transportation habits.

Waze Carpool lets riders and drivers choose their carpool buddies. The company says that the “best matches” — those closest to a preferred route or a co-worker on the same shift — will appear at the top of the list, and payment will be handled within the app. Connecting drivers and riders on Waze Carpool will become more efficient as more drivers and riders sign on.

To be sure, what Waze is offering differs significantly from Uber and Lyft’s respective carpooling services. Drivers are paired with riders with nearly identical commutes based on home and work addresses. Waze Carpool riders are charged a maximum rate of 54 cents per mile, which is the current IRS reimbursement rate for business travel by car. And drivers and riders are limited to two rides per day. This is not a money-making service; rather, it’s an attempt by Waze to test the waters in the growing ride-sharing market.

Speaking at an event in New York City Wednesday, Waze CEO Noam Bardin said the company’s early experiments with carpooling in the Bar Area were unsuccessful because they were trying too hard to look like ride-sharing apps like Uber and Lyft. After retooling in early 2018, Waze Carpool say a huge spike of growth; just since September, the app has seen a 50 percent spike in user growth.

“When you think about Waze a few years from now, you’re going to think about Waze [as] the mobility platform that gets you to work, not only the platform that tells you which way to go,” Bardin said.

But Bardin did hold out the possibility of taking a percentage of the transaction at some point in the future — but only if the appropriate “density” has been achieved. “If this becomes the way we all go to work, Waze will be taking a piece of the transaction itself,” he said. “But fundamentally today, it’s a question of density: how do you build supply and demand.”

To attract drivers and riders to its new product, Waze is offering some incentives for a limited time. All new riders will get $2 rides for 21 days. Drivers get $20 cash for each referral, and riders get $20 credit for each referral, with a max of 10 referrals per person. Referrals get paid out only after the completed ride.

Now that it’s nationwide, Waze Carpool will be leaning on partnerships with other tech companies in order to scale rapidly. Starting on October 10th, Waze Carpool says it will be available at 50 Amazon Fulfillment Center sites, allowing Amazon employees to carpool to work together. The company is also partnering with cities, businesses, transit agencies, and civic organizations as it seeks to grow its presence.

Users can filter out passengers based on employer or gender, depending on how they want to tailor their experience. Maybe you only want to ride with co-workers. Or members of your own gender. Just like with Uber or Lyft, passengers can rate drivers up to five stars based on punctuality, driving, cleanliness, and a host of other factors.

But unlike ride-sharing companies, Waze is adamant that its carpooling service isn’t adding any new cars to the road or increasing the total number of vehicle miles traveled in cities. These are cars that are already on the road, driving daily commutes and simply filling empty seats, said Josh Fried, head of carpooling at Waze. They are not Uber and Lyft drivers racking up deadhead miles looking for fares. (Of course, Waze has been criticized for increasing traffic in residential neighborhoods by rerouting drivers away from more congested thoroughfares.)

But research has shown that app-based carpooling services like UberPool and Lyft Shared Rides can make traffic-clogged streets worse in some cities — because most people are using them instead of public transit or walking, according to a new study. Asked whether Waze Carpool could help accelerate the exodus from transit in cities, Bardin was circumspect.

“I’m not going to touch that explosive question” Bardin told The Verge. “Different cities take different approach, and different research has shown whether ride-sharing is helping or reducing traffic.” He mentioned congestion pricing as one of the solutions that cities should consider, but suggested drivers who use Waze Carpool should be exempt from any fees.

“Flying cars are great and all,” he added, “but this is something we can do today.”

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