Uber Extends Alphabet Partnership With New Google Maps Contract

Drivers for Uber Technologies’ (NYSE: UBER) ridesharing service and food delivery business will continue relying upon Google Maps to get people and orders to their destination after the master agreement between Uber and Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) was updated and extended.

How drivers find their way around won’t change, but it could mean a difference for Uber. The agreement changes how it is charged for accessing the mapping technology, from a system that prices the service based on the number of requests that are made to one that is based on the number of billable trips taken, with tiered, volume-based discounts included.

Pins on a map of the U.S.

Image source: Getty Images.

A history of close ties

Uber first contracted with Google Maps back in 2015, and when it went public last year, it disclosed that between Jan. 1, 2016, through Dec. 31, 2018, it had paid Google approximately $58 million for access.

While the terms of the new agreement are for four years, Uber may very well be using Google Maps for many more years to come because it has also said there are no real useful alternatives.

Uber is a heavy user of other Google services as well. In its IPO filing, it said between 2016 and 2018 it had paid Alphabet around $631 million for marketing and advertising, $70 million for technology infrastructure and enterprise services, and approximately $1 million for related services.

Alphabet owns over 5% of Uber’s stock after its GV venture capital business invested $250 million in the company in 2013.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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