With the recent fiasco with the NSA and PRISM program, concern for user privacy has skyrocketed tremendously, and now that the word is out on tech companies, they have no choice but to make things better for their users. Google is doing its part, and it's said that the search giant is secretly testing encryption methods for Google Drive files for protection against the NSA.
According to CNET, sources say that Google is experimenting with encrypting Google Drive files in order to prevent the NSA and other government agencies from digging into users' files. While a small number of files are already encrypted, it seems Google wants to encrypt every file that goes through its Google Drive servers.
PRISM collects data that the companies are required to provide under the Foreign Intelligence Surveillance Act. However, encrypted files don't fall under FISA (as long as the government doesn't know the password to get in), so it seems that companies are heading in this direction with their user files, Google Drive being one of the first cloud services to begin the process.
Of course, companies use HTTPS as a form of encryption in order to protect the communications of files while they're being transmitted over the interwebs, but cloud companies rarely encrypt files that are simply just sitting there in the cloud. This is mainly because it's a complex thing to do and it ups the cost of server computing power.
However, in a time where users are becoming more and more wary of tech companies and the data they have on users, these companies can't become stingy, and they need to start taking action to protect users' files and information, even if that means going out of their way to include encryption and other security benefits.