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Google's Waze fuels up carpooling alternative

Navigation app Waze launches a pilot carpooling service -- called RideWith -- in Israel, even as similar carpooling and ride-sharing apps face scrutiny from regulators.

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Waze has launched its own carpooling service called RideWith. But it's only available in Israel. Waze

Google is running a "limited trial" of a new carpooling service that will connect drivers on their way to work with potential riders, the company confirmed on Monday.

The new service, called RideWith, is powered by the Google-owned navigation app Waze. Available Monday on Google's Android mobile operating system, RideWith allows riders to request a lift to work or other destination. Those requests are sent to drivers using Waze (who have opted into the trial) that make a similar commute. If a Waze driver accepts the request, they pick up at the rider -- whose GPS location is provided via the app -- and together carpool to their destination.

Google acquired Waze in 2013 for nearly $1 billion. Waze, which is available on a range of platforms, including Apple's iOS, is at its heart a navigation app, allowing users to input a destination and get directions. However, the app lets users "contribute" to the Waze community by alerting fellow drivers using Waze to police stops, accidents, slow traffic and potential hazards.

With RideWith, Waze is entering a carpooling market filled with major competitors. Uber, the ride-hailing app that lets people request a black car ride to and from destinations, in August announced a carpooling service called UberPool. UberPool is similar to carpooling options from a range of companies, including Lyft, Sidecar, Ride and others.

For now, RideWith is only available to Android users commuting in the Gush Dan region of Tel Aviv, Israel. A Google spokeswoman said Waze "regularly experiments with new ideas in our backyard, and we have nothing specific to announce at this time."

Carpool startup Ride said in April that over 100 million people in the US commute to work alone each year, and a third of them have a daily commute of at least 30 minutes. Getting those commuters to share a ride not only limits the environmental impact on the planet, but improves road congestion and other traffic woes. And most importantly for carpooling companies, it presents a major revenue opportunity -- if they can convince people to share rides through their services.

The issue is getting regulators around the world to allow such services to operate. Uber has arguably been the most targeted company in the mix, with its black car and low-cost services getting hit with bans in a slew of cities around the world, including some in the US, India and Spain. Regulators in those countries have argued that Uber, by pairing a driver to a rider, is operating illegally and outside the confines of their standard taxi laws. Uber has argued against such claims, but has been forced to suspend its services in some cities.

Carpooling services, in theory, are slightly different. Carpooling services simply connect a person who is en route to a destination and another person who would like to get there. While money changes hands and the service provider takes a cut, companies like Uber and Sidecar have argued that carpooling is different than traditional car-hailing services by the way commuters are connected. They've also touted carpooling's basic economic foundation of allowing riders to split a fare, thus saving people money.

Regulators haven't been so quick to agree that carpooling is legal. In September, the California Public Utilities Commission said that Sidecar's carpooling service was breaking the law and would require a modification to state regulations in order to operate. The commission was specifically concerned with carpooling services charging individual fares to each rider when there were multiple people in the car.

The ruling did little to assuage interest in carpooling. Just a few days after California came down on carpooling, Sidecar in September announced that it had raised $15 million to help fuel its carpooling service. The investment round included Virgin founder Sir Richard Branson.

Whether Google's Waze will be able to sidestep the regulatory hurdles facing carpooling remains to be seen. According to Waze, rather than charge a fare for the ride like competing offerings, the company will only charge based on gas, mileage and standard wear-and-tear. Waze will also receive a commission on the collected fare, which will be paid directly through the app with a credit card. Waze's commission is set at 15 percent, Israel-based news outlet Haaretz is reporting, citing sources.

RideWith is available now on Google's Android platform. Waze said that the feature will be unlocked "user by user when we believe we can provide quality service along your route."