Here’s Why Uber Would Spend $3 Billion on Maps

2 minute read
Uber Taxi App In Madrid
In this photo illustration the smart phone taxi app 'Uber' shows how to select a pick up location at Cibeles Square on October 14, 2014 in Madrid, Spain.Pablo Blazquez Dominguez—Getty Images
By Alex Fitzpatrick

Ride-hailing company Uber is willing to pay up to $3 billion for HERE, a Nokia-owned mapping service that competes with Google Maps, the New York Times reports.

Nokia, a Finnish company you probably best know for its trademark and stubbornly infectious ringtone, is undergoing a highly transformative shift. Once a leading smartphone maker, it’s now focusing networking hardware business. The biggest sign of that shift: Nokia sold its handset division to Microsoft for more than $7 billion last year. So it makes sense for Nokia to want to unload its mapping unit, for which it could earn a pretty penny while also increasing the company’s focus.

But why would Uber want a mapping company? Two reasons.

Uber’s backend systems are powered by Google Maps. When you load up Uber’s app and drop a pin for a pickup, that’s Google Maps. When your driver is following GPS directions to your destination, that’s Google Maps too. Uber’s recent moves into shipping packages rather than people signal it’s interested in becoming more of a full-on logistics company, akin more to UPS than your local yellow cab service. For Uber, having its own mapping unit would reduce its dependence on another company — Google — while it continues to evolve.

There’s another factor at play here, too. Uber executives haven’t been shy about their fondness for driverless cars; the company is partnering with Carnegie Mellon University to work on the technology. After all, robots don’t strike for higher wages, nor do they assault passengers.

Driverless cars need two things to work. The first is on-car sensors, which constantly monitor for changing road conditions that require an immediate response, like pedestrians and stop signs. The second is maps, which tell the car where to go on a bigger scale. For driverless cars to be feasible, the maps that power them have to be updated constantly. Imagine a driverless car doesn’t know that construction means a bridge is out, for instance: Dead end. Acquiring HERE, then, would help Uber more quickly realize a future where driverless cars get us all from A to B without us batting an eyelash.

See Uber Protests From Around the World

French Taxi drivers burn tires as they protest in the southern city of Marseille on June 25, 2015 as they demonstrate against UberPOP, a popular taxi app that is facing fierce opposition from traditional cabs.
French Taxi drivers burn tires as they protest in the southern city of Marseille on June 25, 2015 as they demonstrate against UberPOP, a popular taxi app that is facing fierce opposition from traditional cabs. Anne-Christine Poujoulat—AFP/Getty Images
French taxi drivers protest Uber
Police officers in riot gear attempt to flip a car back onto it's wheels at Porte Maillot on June 25, 2015 in Paris. Protesters blocked roads to airports and train stations, overturning cars and setting tires on fire.Guillaume de Senneville—Demotix/Corbis
Hundreds of taxi drivers gather next to the Olympia Stadium to protest ride-sharing apps on June 11, 2014 in Berlin.
Hundreds of taxi drivers gather next to the Olympia Stadium to protest ride-sharing apps on June 11, 2014 in Berlin.Sean Gallup—Getty Images
A demonstrator kicks a car, suspected of being a private taxi during a 24 hour taxi strike and protest in Madrid on June 11, 2014.
A demonstrator kicks a car, suspected of being a private taxi during a 24 hour taxi strike and protest in Madrid on June 11, 2014. Paul White—AP
A taxi driver listens to speeches by his colleagues, during an Europe-wide protest of licensed taxi drivers against taxi hailing apps that are feared to flush unregulated private drivers into the market, in front of the Olympic stadium in Berlin on June 11, 2014.
A taxi driver listens to speeches by his colleagues, during an Europe-wide protest of licensed taxi drivers against taxi hailing apps that are feared to flush unregulated private drivers into the market, in front of the Olympic stadium in Berlin on June 11, 2014. Thomas Peter—Reuters
Taxi drivers hold a banner during a protest in Barcelona on June 11, 2014.
Taxi drivers hold a banner during a protest in Barcelona on June 11, 2014. Josep Lago—AFP/Getty Images
London taxi's line up on The Mall during a protest against a new smart phone app, 'Uber' on June 11, 2014 in London.
London taxi's line up on The Mall during a protest against a new smart phone app, 'Uber' on June 11, 2014 in London.Dan Kitwood—Getty Images
Taxi drivers park their cars and honk the horn in protest on Pennsylvania Avenue, bringing street traffic to a stop as they demand an end to ride sharing services such as Uber X and Lyft on June 25, 2014, in Washington.
Taxi drivers park their cars and honk the horn in protest on Pennsylvania Avenue, bringing street traffic to a stop as they demand an end to ride sharing services such as Uber X and Lyft on June 25, 2014, in Washington.PAUL J. RICHARDS—AFP/Getty Images
An Italian taxi driver distributes leaflets reading "Don't take an illegal taxi, take a white regular taxi" during a protest on June 11, 2014 in Rome.
An Italian taxi driver distributes leaflets reading "Don't take an illegal taxi, take a white regular taxi" during a protest on June 11, 2014 in Rome.ANDREAS SOLARO—AFP/Getty Images
Taxis drivers block a highway outside Paris, near Roissy on June 11, 2014, as they take part in a demonstration to protest the growing number of minicabs, known in France as Voitures de Tourisme avec Chauffeurs (VTC).
Taxis drivers block a highway outside Paris, near Roissy on June 11, 2014, as they take part in a demonstration to protest the growing number of minicabs, known in France as Voitures de Tourisme avec Chauffeurs (VTC). Fred Dufour—AFP/Getty Images

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