Uber Out of the Running for Here, Nokia’s Digital Mapping Service

Uber has made no secret of its global ambitions. The company's plans, however, will not include the multibillion-dollar purchase of Here, the main competitor to Google Maps.

Uber, the ride-hailing service, is now out of the running to acquire Here, according to three people with knowledge of the talks. The company had submitted an offer for the mapping division this year for as much as $3 billion.

The logo of Nokia Oyj's connected driving maps unit HERE sits on the rear passenger door of a Land Rover SUV automobile, produced by Tata Motors Ltd.'s Jaguar Land Rover unit, outside the HERE offices in Berlin.
Krisztian Bocsi | Bloomberg | Getty Images
The logo of Nokia Oyj's connected driving maps unit HERE sits on the rear passenger door of a Land Rover SUV automobile, produced by Tata Motors Ltd.'s Jaguar Land Rover unit, outside the HERE offices in Berlin.

Instead, the three people said, negotiations for Here have focused on a potential deal between Nokia and a consortium of German automakers, including BMW, Audi and Mercedes-Benz.

The automakers rely heavily of the Finnish company's digital mapping division to power their onboard navigation and entertainment systems. The people would speak only on the condition of anonymity because the discussions were private.

Multiple private equity and industry players, including the Chinese tech giants Baidu and Tencent, had also shown significant interest in acquiring Here. But their interest has waned as the carmakers' continued, the people said.

As other potential suitors have dropped out of the bidding process, the three German carmakers have increasingly taken a tough negotiating position with Nokia, according to two of the people.

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The main sticking point has been price. Nokia, which recently agreed to buy the French-American telecommunications equipment maker Alcatel-Lucent for $16.6 billion, wants at least $4 billion for its mapping business, though the automakers think they can acquire the unit for less, according to the people with knowledge of the talks.

The negotiations may push back any deal announcement until August, though the people warned the sale of Nokia's mapping business could still fall through or that potential buyers like Uber could jump back in.

Krisztian Bocsi | Bloomberg | Getty Images

Spokesmen for Nokia and Uber declined to comment. Representatives for the German automakers were not immediately available for comment.

The widespread interest in buying Nokia's mapping division has highlighted the growing need for digital maps in a variety of online services, particularly those used on smartphones.

Many of America's other big companies rely on digital mapping assets in one form or another to power services like in-car navigation and online directions. Amazon, FedEx and Microsoft, for instance, have licensed Nokia Here mapping data for years to power navigation and online directions services.

Read MoreNokia Maps vs. Apple Maps: New 'Here' App Squares Off Against Maligned iOS 6 Maps

But for some companies, like Uber, there is a growing strategic interest in owning or controlling the mapping technology assets that power their services, instead of relying on large partners who could potentially become competitors.

Uber, flush with billions of dollars of venture capital, has expanded at breakneck speed to over 300 cities in more than 50 countries from Canada to China. But it has also increasingly positioned itself beyond its taxi roots to become a logistics company, aiming to deliver people and things within cities as quickly as possible — all through the use of online digital maps.

Last week, Google announced it was piloting a car-pooling program in Tel Aviv, a small test to see if Israeli commuters were willing to share rides during rush hour for a small fee. Uber relies largely on Google Maps for its service, although the company uses other sources of mapping data as well.

Read MoreUber offers up to $3B for Nokia mapping unit

Analysts said Here's strength in the transportation sector would have helped Uber reduce its reliance on Google Maps and other services. A mapping tool built with Here's know-how, for example, could have helped with services like Uber Pool, the company's ride-sharing initiative that uses geospatial mapping data to pair riders with drivers.

Google Maps has an estimated one billion mobile users, or more than 10 times the amount of Here's smartphone users, but Nokia's division dominates in automobile mapping — a field in which both Google and Apple, which has struggled with its own mapping service, have marked for growth.

While Uber is now out of the running for Nokia's mapping unit, the ride-booking company has not stood still. In March, it bought deCarta, an almost decade-old mapping software company based in San Jose, Calif., to bolster its mapping efforts. And last month, Uber announced that it had acquired a portion of Microsoft's maps technology and extended employment offers to around 100 engineers on Microsoft's mapping team.