I expected this deal to happen right after Dara became CEO, and definitely after Uber sold off their self-driving division. This is why I've owned Uber stock since the IPO, despite the ongoing volatility.
Uber is a software-powered company, but their business model is squarely a marketplace. Running a marketplace is an economics problem, not a technical one. The actual dollars are made from the neverending work of balancing cost of acquisition from both sides of the market, while keeping all the logistics from overwhelming the operational costs. This is true whether it's finance (e.g, health insurance), goods (Ebay), or services (Uber).
There's a big huge gap between this and say, SaaS (trading money for bytes in a specific order and occasional human help) or a super hard hardware problem. When a company tries to have both, they often get stuck with two mediocre businesses rather than one amazing one.
The other key component is just Dara's style specifically. His past successes comes from in other marketplaces (Expidia), and he knows that running marketplaces is all about shaping deals to feed both markets. Despite the history between the two companies, if a deal is obvious, he'll find a way to make it happen. Google isn't prepared for a huge push into a consumer transport service, and Uber isn't willing to bet $20B on a tech hardware moonshot. The gravity for this deal makes it inevitable.
From personal experience: I can say that I never worked for Dara, but I did work for his cousin, and the whole family has the same style. They are very effective at execution, especially when it comes to shaping deals like this. This will work to the benefit of both Google and Uber.