Connect with us


Alphabet to invest $1B in Lyft after investment in Uber turns sour



Alphabet to invest 1B in Lyft after investment in Uber turns sour

Google’s parent company, Alphabet, is leading a $1 billion investment in Lyft as the ride-sharing company explores the possibility of going public in 2018. This is particularly interesting because Google Ventures was an early investor in Lyft’s main competitor, Uber.

If Lyft moves forward with an IPO in 2018, it will propel the burgeoning ride-sharing industry. Currently, around half a percent of the miles driven in the United States are done through ride-sharing, leaving a tremendous upside potential for the industry.

There’s a good chance that this investment by Alphabet may be driven by more than just good business practices. Uber has been sued by Waymo, the self-driving car unit owned by Alphabet, for allegedly stealing trade secrets after hiring a former Google employee.

Uber is currently valued at $70 billion compared to Lyft at $10 billion, but Uber has been embroiled in multiple scandals and lawsuits recently. Their co-founder and former CEO was ousted this year by the board.

“Ride-sharing is still in its early days,” said David Lawee, a partner at Alphabet’s investment arm, CapitalG. “We look forward to seeing Lyft continue its impressive growth.”

Lawee will assume a role on the board at Lyft as part of the investment deal.

Further Reading

Alphabet leads $1 billion Lyft investment – Axios parent company Alphabet today announced that it has led a $1 billion in ride-hailing company Lyft at an $11 billion post-money valuation, one month after Axios first reported that the two companies were in talks. The investment came via CapitalG, Alphabet’s growth equity unit, with CapitalG partner David Lawee joining Lyft’s board of directors.

Why it matters: Alphabet was an early investor in Lyft rival Uber via its Google Ventures unit, but since has become a legal antagonist.

What Alphabet’s big investment in Lyft means for self-driving cars – Business Insider is important because self-driving cars are unlikely to exist without a mobility service to support them. The vehicles are far too costly to own and can only seriously thrive as a method to cut taxi costs, encouraging more frequent ridership.

Major automakers see this as well. GM has invested $500 million in Lyft, Volvo has partnered with Uber, and companies like Ford have launched their own car-sharing services.

A quarter of American drivers might be better off using Uber or Lyft than owning a car – MarketWatch’ve conducted an analysis of the all-in cost of car ownership, and we found that mobility services such as ride-hailing and ride-sharing apps — which few people today would consider their main mode of transportation — will likely provide a compelling economic option for a significant portion of Americans. In fact, if the full cost of ownership is accounted for, we found that potentially one-quarter of the entire U.S. driving population might be better off using ride services versus owning a car.

Advertisement Donate to NOQ Report

NOQ Report Daily





Copyright © 2018 NOQ Report.