Tuesday, February 3, 2015

(The Big Disrupt) Google: Why Is Google Deciding To Put Uber Out Of Business?

Travis Kalanic, CEO of Uber Technologies, doesn’t strike me as a man with much fear in his heart but with Google reportedly planning to enter the car hailing business, no one would blame Kalanic if he had his heart in his mouth reading about Google looking to enter his company’s already competitive market.

It’s kind of hard to process why Google, the largest investor in Uber through its venture capital arm Google Ventures, would want to compete directly with a company that’s been successful and loved by its customers. But with Uber announcing recently that it’s partnering with Carnegie Mellon to develop driverless cars, the motivation for Google to crush Uber becomes apparent.

In one of the first articles at The Big Disrupt, we suggested that Google would use Uber as a testing ground for their driverless cars. Kalanic, who has expressed his favoring of driverless cars as it would make Uber rides cheaper by eliminating the need for human drivers, would have clearly signed off with Google running a driverless fleet of cars under the Uber banner.

With this in mind, it really doesn’t make sense that why these two companies, whose interests are aligned, would compete with each other. The fact that Google has decided to compete directly with company it’s invested in should scare the life out of everybody at Uber as they would square up against a company with deeper pockets and better resources in Google.

These two facts almost certainly means Google will put Uber out of business or at the very least, make life really difficult for Uber to stay afloat. Why Google is even prepared to do this to easily its most visible and well known investment is particularly startling as this sends a red flag to startup founders and VC’s everywhere that Google is the last place you want investing in your company as if they’re prepared to do this to its most well-known and successful investment that has already produced a handsome return, imagine what they would do to a “three guys a garage” operation that happened to create the next big thing.

Currently Uber and its competitors have a head start in the marketplace and with Uber already looking to go driverless, Uber may able to hang tuff for a while but with Google having deeper pockets, more resources and a serious head start where it counts in developing driverless cars,  it could soon turn into a losing battle. However, Uber, infamous for their aggressive and competitive nature, are clearly ready for a fight that they might not win. 

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