Google announced it is removing the remaining distance-based service area businesses. It will be converting them to the closest named area. Google said "Service-area businesses currently based on a distance will be automatically converted to the closest named areas, like San Francisco, CA or Islington, London."
Business will be able to review these named areas. "Business owners will be able to review these updates in their Google My Business account under Google updates, and can either accept or provide a new service area. They’ll also receive an email notification about the change," Google said.
They started this process last November and is now moving to complete this process.
Ben Fisher said in the Local Search Forums, "So, Google started down this path in November of last year. The idea is to remove the radius and use service areas. This is geared toward making SAB's as important as a storefront. They have given listing owners an ample amount of time to make the change and now this update will force a change to your nearest service area. As of today... this will NOT help you rank better. Down the road, I think the intent is to help users find you better (ranking) in places you serve."
Forum discussion at Local Search Forums and Twitter.