The power of Uber doesn't lie in it's app,
Google famously has been forever trying to have a chat app and we all know how many times it's failed.
Then comes Google+, Google's attempt to get into social networking.
Unless Google came up with something novel or something different from incumbents it never ever succeeded.
Any SWE worth his salt can build a ride booking app in a month or two, but the traction and confidence in using that app both by riders and drivers is what drives its success.
I'm not sure what else Uber could possibly have. Name recognition? More people know Google than Uber. Install base? More people have Android phones than have the Uber app. Drivers? Uber is trying to eliminate its drivers, as this deal shows. Uber is defenseless against Google.
Name recognition and installed user base in a 2-sided marketplace. That's huuuge.
Google owns the action "to google something". Uber owns the action to "get an Uber".
Also, don't underestimate the value of a working business. Google has only ever been successful with a search engine and an ad platform. They've never been success in a consumer product/service. I don't think their corporate structure and business culture makes them likely to succeed in B2C.
Uber has it's flaws, but they've been very reliable as a consumer. And have responsive and helpful support. Imagine having to rely on Google to provide support to a stranded user or resolve a dispute.
The idea is to make it a 1-sided marketplace. Uber's entire business model is focused around squeezing vendors - now they think they can squeeze Google if Google becomes their vendor instead of a bunch of independent contractors who are legally inhibited from collective bargaining? Uber has no idea how to be successful when the seller side of their marketplace is organized and plays hardball at the negotiating table.
Tesla and Waymo are arguably pretty close in self-driving technology, so there's already another player. Uber could just buy a bunch of Tesla's once their tech is good enough for autonomous driving.
The car companies will do everything to prevent Google from having that monopoly. E.g. Google could be forced to license their software. Then, Uber gets their 2-sided marketplace back.
