Uber bidding for Here, Nokia’s mapping service
As it tries to position itself more as a logistics company — delivering people and things within cities as quickly as possible — Uber has relied heavily on Google Maps.
That dependency may soon change.
Uber has submitted a bid for Here, the main competitor to Google Maps, for as much as $ 3 billion, according to three people with knowledge of the offer, who spoke on the condition of anonymity. Here is owned by Nokia, the Finnish telecom giant, which announced last month it was considering selling the business.
The bid is competing with one in the works from a consortium of German automakers, including BMW, Audi and Mercedes- Benz, according to two of those people. The automakers are teaming up with Chinese search engine Baidu on the offer, the people said. A separate bid from an undisclosed privateequity firm has also been submitted, and Nokia is expected to announce the sale of its mapping unit by the end of May.
Negotiations over the sale are continuing, and the talks still may not lead to a deal, the people cautioned. Representatives for San Francisco’s Uber, the German automakers and Nokia declined to comment on the deal rumors.
The multibillion- dollar battle to buy Here highlights the growing importance of digital mapping services as companies connect their products to the Internet. Other tech giants, including Facebook and Microsoft, have previously shown interest in Nokia’s mapping unit.
Automakers and tech giants like Google have unveiled a series of driverless car projects that rely heavily on up- to- date road data. Companies like Amazon and FedEx use mapping information for global logistics. And tech startups, including Uber and Airbnb, the vacationrental website, have incorporated digital maps into the heart of their businesses.
While Google Maps has an estimated 1 billion mobile users, or about 10 times the amount of Here’s smartphone users, Nokia’s division dominates in automobile mapping — a field in which both Google and Apple, which has struggled with its mapping service, have earmarked for growth.
Nokia’s mapping business holds more than an 80 percent global market share for built- in car navigation systems and spends hundreds of millions of dollars each year to update its maps, which span from New York to New Delhi. Here, which is based in Berlin, employs about 6,000 people worldwide to maintain Nokia’s digital maps and connected-car services, with almost 3 million daily adjustments. The unit reported yearly revenue of $ 1.1 billion, or less than 8 percent of Nokia’s total sales in 2014, according company records.
“It’s extraordinarily difficult to get this type of mapping data,” said Jamie Moss, an analyst at technology research company Ovum in London. “Other than Google, Here is one of the few companies that can offer this data right now.”
Analysts said Here would give Uber access to a fully established digital mapping business.
The mapping tool, they say, could help with services like Uber Pool, the company’s ride- sharing initiative, which uses geospatial mapping data to pair riders with drivers. To carry out such matches quickly, the company needs significant engineering power and a rich trove of mapping data, according to people with knowledge of the project.
Uber, whose backers include Google’s venture capital arm, has taken steps in recent months to hedge against its heavy reliance on the search giant. This year, for example, the company unveiled the Uber Advanced Technologies Center that, in partnership with Carnegie Mellon University, is working on mapping and autonomous vehicle technology.
And in March, Uber acquired deCarta, an almost decade- old mapping software company in San Jose, to bolster its mapping efforts. The company also has hired a number of mapping software engineers in recent months, according to two people familiar with Uber’s hiring efforts.
The company’s plans, however, may still be outflanked by the German automakers, which also view Nokia’s mapping business as central to their future.
Mercedes and other automakers already are testing autonomous vehicles that rely on Here’s technology to guide cars around city streets with limited intervention from drivers. They are reluctant to become overly dependent on Google Maps, which offers similar services, particularly because Google is working on autonomous vehicles of its own.