THE BLOG

Google Enters the Collaborative Economy in a Big Way

02/10/2015 01:20 pm ET | Updated Apr 12, 2015

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Here comes Google, with a series of five market moves injecting them as a central player for the collaborative economy.

Google's mission is to organize the world's information. But it doesn't just start and stop there. They also want to organize the world's logistics, commerce, local transportation, service economy, and even how people obtain and receive loans.

In the past, our perspective of the Collaborative Economy has been through startups, like Airbnb, oDesk, Lyft, Uber and Lending Club that enable people to get what they need from each other, using commonly available technologies like online marketplaces and mobile apps.

Today, Google has entered the Collaborative Economy with a series of announcements that leave a casual reader scratching their head. But placing the announcements line by line, you can see an organized attempt to enter this space traditionally dominated by early stage startups.

  1. Google is a major investor in Uber and Lending Club. They started with investments, a great way to test the waters. Google Ventures made their largest investment in Uber ($258 million), lending promise for a future of a lifestyle and logistics app which enables people to bypass car ownership and more. Then, Google invested in the P2P money-lending platform, Lending Club ($110 million), which enables individuals to bypass traditional banks. This gives Google additional market insight and a foothold from which to deploy.
  2. Google plans to roll out self-driving cars, competing with car manufactures. Last year, Google unveiled their friendly-looking, self-driving car, which they suggest will enable anyone to be mobile, reclaim time driving, and reduce the need for car ownership. In Silicon Valley, I often see self-driving Google cars whizzing around in Mountain View and on the major freeway, U.S. 101. Google suggests that these will be available in mass production for the public within five to 10 years.
  3. Google now resells P2P loans, competing with banks. P2P marketplaces of buyers and sellers are in every aspect of society. Take a look at the Collaborative Economy version 2.0 to see over twelve industries that are impacted. Last month, Google announced they're going to resell bank loans from Lending Club, reducing the need for individuals to get loans from banks, competing directly on ease and price.
  4. Google partners with Airbnb and Lyft, challenging hotels and taxis. Last week, Google announced the expansion of "Google Now," a mobile app that intends to be the starting point for our daily needs. They will aggregate Airbnb and Lyft data and more, enabling us to quickly and efficiently find the right on-demand services in real-time. Don't expect the partnership to stop there. Just as Google leaned into Open Social to connect with many social networks, they'll partner with many startups who want to connect their API. Imagine Homejoy, Yerdle, Sprig, Instacart, TaskRabbit, Munchery SpoonRocket, and others.
  5. Google is reportedly building a ride hailing app to compete with Uber. It has been suggested that self-driving cars could be idling in our neighborhoods, waiting for us to order food, groceries, electronics, or even get a ride. With this new system, people are sharing ownership of cars with neighbors, hailing them on demand. It's worth noting that Uber was absent in last week's announcement of Google Now, although a partnership with Lyft was announced.
What it means to the Ecosystem: Google's announcements, in sequence spell considerable impacts to the entire ecosystem of startups, purists, investors, businesses, merchants, and of course, to the people, here's how each ecosystem player is impacted:
  • Google will be in a dominant position if they can successfully deploy. Google is the homepage of the internet and, as a result, the start of the Collaborative Economy, as they own the 'intent' phase with Google Search. In the future, they'll organize information about what people need, and be able to deliver in real-time, dolling out links and customers to startups, sometimes through their self-driving vehicles.
  • Google and Uber are in a tenuous relationship. Over a year ago, I predicted that Uber + Google is a threat to Amazon. In reality, it looks more like Google may be a threat to Uber and Amazon, as they could potentially offer the same things, but on a broader scale. Google has greater ambitions and, perhaps, the business models (or egos) don't align at Google and their investment, Uber.
  • Startups have no choice but to evaluate partnering with Google. By connecting to Google Now's API, they can quickly gain market expansion by potentially being listed in search results, tapping a verified set of Google users, accessing new data types (like intent and location), and accessing historical customer data, all on a proven platform that will stand the test of time.
  • Sharing economy idealists feel threatened as large, tech companies embrace the concept. The notion of quaint neighborhood sharing will quickly be supplanted as Google makes it easy for ordinary people to participate in this new economy. The one difference is that, when sharing is efficient, it actually looks like an on-demand delivery model. I'll stand firm, that this is tech-based commerce and capitalism, not neo-socialism.
  • Investors embrace Google's streamlining of the market. This injection of such a large entity further validates the investment thesis that collaboration of unwanted resources in two-sided marketplaces is a profitable business. With Google's multi-million dollar cash injection and shared offerings of search, apps and self-driving cars, they'll provide additional market acceleration.
  • Brands seek to separate hype from reality with new commerce models. Many are already deeply hooked into Google's ad business. Eventually, they'll have the opportunity to offer their wares, services and solutions on the Google Now platform, as well as connect to various APIs to expand their business reach. Google+ self-driving cars spells opportunity for local merchants, restaurants, and retailers who seek solutions for the 'final mile' of delivery.
  • For the people, this mainstreams access to real-time services rather than ownership. Most importantly, for the public, and I mean mainstream, normal people, this provides validity for the Collaborative Economy. Using commonly available search tools or apps, people can quickly get services, rides and products from companies in one trusted space: Google.

Google's mission is to organize the worlds' information, but they won't stop there. They'll also organize our delivery, our transportation, our food service, our money, and our lives.

Here comes Google. Get ready.

(image from Mark Fiser)