That's right, GPS error can be on the order of 10s of meters, worse in urban environments. Google (and presumably Apple) use WPS to enhance location data, meaning a triangulation (simplification here) or location based on known WiFi router and bluetooth beacon positions. They also have a team dedicated to more complex geometric calculations of how the GPS signal may be reflected given the known positions of buildings.

But if you have a clear line of sight that's a different issue. I went cycling on a path next to a river and the GPS trace was buttery smooth.