Will Alphabet Invest $1B in Ride-Hailing Provider Lyft?

16 September, 2017, 01:54 | Author: Terri Saunders
  • Larry Page

Alphabet Inc.'s (GOOGL) search unit is reportedly exploring an investment in Lyft, Bloomberg reports.

But an Alphabet investment in Lyft also could further complicate an already dicey web of relationships between Lyft, Alphabet and Uber. Previously, Google had invested a whopping $258 million in Uber via Google Ventures and now the company is suing Uber for, allegedly, stealing trade secrets from Google's self-driving vehicle company, Waymo.

The investment, which could come from Alphabet's private equity arm CapitalG or Google itself, will be about $1 billion. Also with the investment, it could allow Lyft to become independent, which was co-founder, John Zimmer's, priority for the company. The money could help the U.S. ride-sharing service expand to global markets and try to take some business away from rivals.

In addition, Waymo and Lyft announced a partnership in May to develop new autonomous vehicle technologies.

Once upon a time, venture capital firms clamored over each other to invest in Uber, with many believing that its eventual success could rival or even beat Facebook's. It's likely that the litany of scandals that have plagued Uber in recent months has been a source of major benefits for Lyft.

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This Alphabet investment might be aimed at keeping Lyft on its side amid the legal battle with Uber. But the offer would be at a discount of 30 percent or more from the company's current valuation.

Lyft could certainly do with the funding as it tries to play catch up with Uber.

This, we believe, is definitely benefiting Uber's biggest rival Lyft.

Although these conflicts with Alphabet have not been earning a good name for Uber, it still has big brand recognition in and outside San Francisco and Los Angeles.

Alphabet isn't the only one showing interest.

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