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Uber forms alliance with TomTom

By Reuters
Amsterdam/Barcelona, 13 Nov 2015

Dutch navigation company TomTom has signed a multi-year contract to provide Uber with digital maps and traffic data for the software used by its drivers.

It is the latest in a series of deals for the Dutch company, which also signed agreements this year to provide maps for Volkswagen and renew a contract to supply maps for Apple's built-in iPhone navigation app.

TomTom CEO Harold Goddijn said Uber had chosen the Dutch company because the ride-hailing app company wanted to have "total control" over its own products.

"What they [Uber] get from us is total control of their application," Goddijn said at the Morgan Stanley TMT conference in Barcelona. Financial terms of the Uber deal were not disclosed.

"Contrary to some of our competitors, we provide technology but also the raw data and databases to run" it, he said, adding the deal relieved Uber of the need to "share sensitive information with other companies".

Uber declined to comment beyond saying in a statement that it looked forward to working with TomTom.

TomTom's digital map competitors Google and former Nokia subsidiary HERE, which was purchased by a consortium of German carmakers in August, are seen as long-term competitors to Uber as cars incorporate computer-assisted driving technology or become self-driving.

Uber, which initially had bid for HERE, instead purchased Microsoft's imagery acquisition and map data processing operations in June.

News of the Uber deal sent TomTom's shares up 8.2% in Amsterdam on Thursday and they have now more than doubled this year.

Goddijn said he expects TomTom to secure additional deals with carmakers in the future following the German carmakers' purchase of HERE.

"Basically from orders booked in 2014 and 2015, we can see that revenue in the licensing segment will grow very significantly in 2016 and 2017 and 2018," he said.

Audi, BMW and Daimler bought HERE, Nokia's former digital mapping subsidiary, in August for EUR2.9 billion.

Goddijn said the ownership of HERE by the Germans gives other automakers an "uncomfortable feeling".

"It think on that sentiment it is easier for us to get in front of [other carmakers] and discuss business" he said.

"I think that will lead over time to more wins for us."

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