Google Parent Making Humongous Bet On Lyft

Isaac Cain
October 20, 2017

The new money will help Lyft doubling down on the US market, where it has made gains against Uber but still lags its rival.

Initially, Alphabet teamed up with Uber. It's also close to raising what could be more than $1 billion from SoftBank, a Japanese conglomerate.

Waymo, the autonomous-driving subsidiary of Alphabet, in May announced an alliance with Lyft, Uber's main rival.

There's yet another complication in Alphabet's relationship with start-up giant Uber.

Lyft raised $600 million at a $7.5 billion valuation in April this year, with investment from new partners including Canada's public employee pension fund. CapitalG partner David Lawee will also join Lyft's board as part of the transaction.

More news: Elliott granted second injunction, suspension put on hold (again)

Spokespeople for Lyft and Alphabet have said the latest investment will not have any bearing on the Waymo partnership. GV invested in Uber in 2013 but has since had a strained relationship with the ride-hailing company, as Uber began to develop autonomous cars and compete directly with Alphabet.

David Drummond, an SVP at Alphabet, left Uber's board in 2016 citing "the overlap between the two companies". In February, Google self-driving auto company Waymo sued Uber for intellectual property theft and patent violations; the trial, which is set to start December 4 and is expected to last for two weeks, could result in a multi-billion dollar judgment.

"It is another punch by Alphabet at Uber", said Erik Gordon, an entrepreneurship expert at the University of Michigan's Ross School of Business.

Uber has most recently been valued at $68.5 billion, but a series of scandals has taken a toll on its valuation. On paper, Uber remains the far more valuable company. It points out in its statement that just 0.5% of miles traveled in the USA are made through rideshare networks which leaves a big opportunity for companies, like Lyft, to seize on.

Other reports by LeisureTravelAid

Discuss This Article