Alphabet Mulling $1 Billion Investment in Lyft, Report Says

Gladys Abbott
September 16, 2017

Spokespeople for Alphabet and Lyft declined to confirm the report.

Over the past 12 months, the company's shares have rallied 17.8% compared with the industry 's gain of 17.2%.

In April, Lyft raised $600 million in fresh funding, increasing its valuation from $5.5 billion to $7.5 billion. With a billion dollars in its wallet, Lyft could take advantage of this and seriously increase its market share in the United States, expand overseas, and give Uber a run for its money.

Access to Alphabet's revolutionary technology and $1 billion in capital presents Lyft with an ideal opportunity to pile further pressure on its much bigger rival. Uber recently kicked out CEO Travis Kalanick and replaced him with Dara Khosrowshahi after slew of allegations of sexual harassment, sexism and other inappropriate behavior within the company.

"We're looking forward to working with Lyft to explore new self-driving products that will make our roads safer and transportation more accessible", a Waymo spokesperson said at the time.

Alphabet is no stranger to the ride-hailing market following early investments with Lyft's biggest rival, Uber.

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Furthermore, the substantial funding could make a big impact on the U.S. ride-hailing market, in which Lyft has already gained market share this year as a result of Uber's series of scandals.

"What is Uber going to be do if Google invests in Lyft?". It would allow the company to expand its technology and services. In fact, CB Insights estimates financing in the auto tech startup sector have been over $1 billion in 2016 and more investments will surely follow.

Alphabet isn't the only one showing interest.

Currently, Alphabet has a Zacks Rank #3 (Hold).

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

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