Aug 31, 2016 · 8 minutes

Earlier this week, I was gloating about how right we tend to be on Uber. Well, I didn’t see this one coming: Google isn’t waiting for self-driving cars. It’s going to start competing with Uber now.

According to the Wall Street Journal, Google has leveraged Waze to come at the market a different way. It isn’t wasting time with black cars or networks of professional drivers. It’s learned from watching Uber and Lyft for the last seven years or so. Instead, it’s starting where Lyft and Uber see the most growth potential now: Highly efficient carpools where the drivers’ fees aren’t supposed to be their livelihood. They are tantamount to “gas money.”

From the Journal’s story:

Unlike Uber and its crosstown San Francisco rival Lyft Inc., which each largely operate as on-demand taxi businesses, Waze wants to connect riders with drivers who are already headed in the same direction. The company has said it aims to make fares low enough to discourage drivers from operating as taxi drivers. Waze’s current pilot program charges riders at most 54 cents a mile—less than most Uber and Lyft rides—and, for now, Google doesn’t take a fee. 

According to the Journal, Waze has already successfully piloted this in its home country of Israel. It’s in a very limited test now, due to be fully released in San Francisco in the fall.

There are a few interesting things about the approach, other than the fact that it both doesn’t wait for self-driving cars to start building a user base but also manages to avoid hassles with professional drivers. The service is aimed at people who are already going somewhere simply picking up carpool-mates-- which is close to the original Zimrides business model.  (One red flag: It doesn’t vet anyone relying on “reviews” instead. Come on Google, you can do better than that...)

It’s interesting that Google is leveraging a trusted mapping product that nearly every Lyft driver I’ve ever ridden with already uses and one that already has an sizable active user base of some 65 million. That means, Google isn’t starting from scratch as some people had speculated. If Google became a remotely sizable competitor that seemingly sky-high price near $1 billion to buy Waze could look as transformative as YouTube or Android.

The more interesting-- but less surprising bit-- is that Google isn’t taking a fee. This is what we’ve been saying about how the ridesharing battle would change once Uber wasn’t the company with the deepest pockets. Cash has always been Uber’s singular advantage. But although Uber can manage to burn well over $1.2 billion in just six months propping up its business, even it can’t afford to charge absolutely nothing. Unlike Google, it won’t have a business.

This comes on the heels of reporting-- first broken by the Information-- that Alphabet’s David Drummond has left Uber’s board. That’s not a huge shock. Google’s CEO back when it was called Google, Eric Schmidt, similarly had to leave Apple’s board once Google got more serious about competing on smartphones. Jobs change, strategies change, conflicts arise and people leave boards all the time in this world.

Still, it’s notable that the most highly valued company in Google Ventures’ portfolio is now a fierce competitor. But that’s ride-sharing, right? Just last month Didi threw its own consortium of Uber-spoilers under the bus to dramatically change its alliances too. There are more alliances made and broken in global ride sharing than the Big Brother house.

Google needs little from Uber at this point. Google Ventures isn’t even a traditional venture firm that relies on top returns to raise its next fund. Uber, meantime, still relies on Google’s maps, is behind on cars, and presumably a good number of its users access its app via Android. Just ask Yelp or TripAdvisor if Google has ever used its dominant assets as unfair advantages against competitors.

Meantime, Uber has a new secret weapon as it seeks to solidify its market position amid emerging competitive threats and a big technological inflection point: It’s hired yet another person to change its image.

Fortune first reported that Uber has “poached” Target’s chief marketing officer Jeff Jones. I put poach in quote marks, because the same article says that Jones approached Uber amid a fleeing of talent from Target.

He’s not only getting a new employer but a promotion. He isn’t just the head of marketing, he is the President of all ridesharing, or some 99% of Uber’s business. That makes him the second highest ranking exec after Kalanick.

It’s not common for engineer-obsessed “tech” companies these days to value marketing quite so highly, but Uber is well aware it has a major brand problem. Reminder: Even UN Women backed out of a PR-friendly deal with them because of the backlash. There have been several attempts to reboot Kalanick’s image in particular, and when David Plouffe wasn’t getting results, he was kicked upstairs for Rachel Whetstone who cleaned house and brought in an entirely new team.

Uber has had a bit of a revolving door when it comes to mid-career management:

Uber has had a mixed record hiring mid-career talent.  MSFT -0.36%  andGoogle  GOOGL -0.49%  veteran Brent Callinicos had a relatively short tenure as the company’s chief financial officer, as did David Plouffe, the former Obama campaign chief who headed Uber’s communications and policy initiatives and currently serves as an Uber board member and advisor. Top-level recruits that have stuck include chief technologist Thuan Pham, who joined from VMware  VMW -1.34% ; Joe Sullivan, head of security, who previously was at Facebook  FB -0.55% ; and Rachel Whetstone, who left Google to replace Plouffe.

I’d add to the list of those departed, head of HR Renee Atwood who stunned industry watchers this summer when she jumped ship from Uber-- where presumably recruiting should be a breeze-- to join… Twitter. Where it’s anything but. Pando has previously detailed other accounts of female engineers who refuse to join the company, because of its past behavior, in particular its treatment of women.

But that’s all fine now, because the number two exec, Jones, is a “storyteller.”

While Uber hasn’t elucidated exactly what that the new story will be this time, Jones is not a fan of Kalanick’s most favored message. Again, from Fortune:

Kalanick and Jones first met in February at the TED conference in Vancouver, where Jones had requested a meeting to discuss the possibility of becoming an Uber board member. Jones said he responded critically when Kalanick asked his opinion of a keynote speech he had given minutes earlier at the influential conference. “I said, ‘It’s the first time I’ve seen you speak live, but I’d give you a B-minus,'” recalled Jones, who told Kalanick he thought Uber should focus more on its positive attributes and less on the evils of regulations, one of Kalanick’s signature topics. “I told him, ‘Great brands stand for something, not against something. The TED crowd should have heard what’s possible with transportation.'”

While a pivot away from libertarian disruption may seem to threaten the fundamental underpinnings that founded Uber, those who’ve closely watched the company since the beginning know that Jones got the operative word wrong. It’s not that Uber doesn’t stand for something, as opposed to being against things, it’s that Uber doesn’t really stand for or against anything.

In 2012, we began chronicling how quickly Uber’s libertarian ethos could be jettisoned when convenient. From our previous coverage:

If Rand was hypocritical in her attacks on Medicare, so too does Kalanick enjoy an uneasy relationship with consistency. During his fight with the DC taxi commission, Kalanick repeatedly denounced the "backroom deals" made between corrupt city officials and taxi operators and denied that Uber was trying to make similar deals:

"The notion that there some sort of deal or arrangement or whatever was just not the case," said Kalanick in an interview with the Washington Post. How embarrassing, then, when the Post uncovered documents proving that Uber had indeed tried to make under the table arrangements to operate in DC. Or as the Post's Mike DeBonist put it: "If you’re going to be dismissive of backroom deals, it behooves you to stay out of backrooms."

And there's the rub. Given their Randian origins, we kid ourselves if we think most Disruptive businesses are fighting government bureaucracy to bring us a better deal. A Disruptive company might very well succeed in exposing government crooks lining their pockets exploiting outdated laws, but that's only so the Disruptor can line his own pockets through the absence of those same laws. 

Indeed, three years later we exposed that Uber (and tag-along Lyft) spent more on lobbying in Nevada than the entire gaming industry. Its ranks are filled with government workers, including former head of the CIA Robert Gates, who-- while on Uber’s payroll for the not at all ominous sounding “Uber Military”-- astoundingly advocated that tech companies should be far more willing to hand over user data to the government.

Uber has even used CIA-recommended oppo firms to go after its critics in what US District Judge Jed Rackoff described as “arguably criminal” actions. Uber hasn’t so much disrupted politics as usual as co-opted it, hired it, and fist-bumped it.  

If the fundamental underpinning of Uber was ever a hatred or distrust of government, government workers or the government playbook, then it never stood for-- or against-- anything for very long.

Jones should have a blank sheet of paper for his new Uber “story.” Meantime, Google, which doesn’t have a brand problem, could easily show Uber what it really likes to use cash for a weapon.

Popcorn, please.