- Uber is warning that Google and Apple’s collective dominance over the app economy poses a potential big risk to its business.
- On Thursday, the ride-hailing company filed its S-1 paperwork to go public, offering an unprecedented public look at its business.
- Companies have increasingly complained in recent years about the stranglehold that Google and Apple’s app stores give them over the rest of the tech industry.
- Uber is also reliant on Google Maps to function, and paid some $US58 million to Google to use the technology between 2016 and 2018.
Apple and Google collectively have a stranglehold over the distribution of apps – and Uber is warning that that poses potential major risks to its business.
On Thursday, Uber finally filed its S-1 paperwork to go public in the coming weeks, offering an unprecedented look at the inner workings of the ride-hailing company. It also provides fresh insight into what the Silicon Valley mega-startup views as some of the biggest risks facing it today – and Google and Apple’s dominance of the modern app-powered tech industry makes the list.
“Our platform relies on third parties maintaining open marketplaces, including the Apple App Store and Google Play, which make applications available for download,” it tells potential investors. “We cannot assure you that the marketplaces through which we distribute our platform will maintain their current structures or that such marketplaces will not charge us fees to list our applications for download.”
The warning highlights the near-total dependence modern app developers have today on the proprietors the Android and iOs app stores. Both companies take a standard 30% cut of most transactions, and these apps are entirely at the mercy of each store’s rules on what is and isn’t allowed – a state of affairs that has sparked increasing resentment in the digital industry in recent years.
Spotify has publicly attacked Apple’s App Store, alleging it abuses its power, and has formally complained with the European Commission. Epic Games, the makers of wildly popular game “Fortnite,” declined to make the game available on Android’s Google Play store, instead requiring users to download it directly from the company’s servers.
Uber clearly harbours the same concerns about reliance on these companies. But its warnings extend beyond the app stores alone, also flagging its reliance on Google Maps as a potential vulnerability.
“We rely upon certain third parties to provide software for our products and offerings, including Google Maps for the mapping function that is critical to the functionality of our platform,” it writes. “We do not believe that an alternative mapping solution exists that can provide the global functionality that we require to offer our platform in all of the markets in which we operate … If such third parties cease to provide access to the third-party software that we and Drivers use, do not provide access to such software on terms that we believe to be attractive or reasonable, or do not provide us with the most current version of such software, we may be required to seek comparable software from other sources, which may be more expensive or inferior, or may not be available at all, any of which would adversely affect our business.”
Between the start of 2016 and the end of 2018, Uber paid Google around $US58 million for access to its Google Maps service, the S-1 discloses.
The warning also highlights the twisted nature of Uber and Google’s tensions. Most directly, Google’s sister company Waymo is building self-driving vehicles that aim to directly compete with Uber’s business. But Google’s privileged position at the top of the app store food chain means Uber is simultaneously dependent on it to survive.
And all the while, Google’s parent company Alphabet is an investor in Uber, following a high profile trade-secrets lawsuit between Waymo and Uber.
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