Google Tells Uber It's Over, Invests $1 Billion On Rival Company Lyft

Alphabet leads $1 billion investment in Lyft, but is GM on the way out?

Google Tells Uber It's Over, Invests $1 Billion On Rival Company Lyft

In an escalation of its ride-hailing war against Uber, Lyft has begun to explore going public in 2018 and is trying to strengthen its position by raising more capital, including $1 billion in new financing led by an investment arm of Google's parent company.

The round was led by CapitalG, the growth investment fund of Alphabet that has also backed large private tech companies such as home-renting platform Airbnb and payments firm Stripe. The internet giant was a major Uber backer, but the companies have clashed over autonomous vehicle technology this year. The news about the fresh round of investments was revealed by Lyft in a blog post.

The company said: "While we've made progress towards our vision, we're most excited about what lies ahead". The fact remains that less than 0.5% of miles traveled in the US happen on rideshare networks. "This creates a huge opportunity to best serve our cities' economic, environmental, and social futures".

Lyft has gained market share in the U.S. this year thanks to the exit of executives at Alphabet and controversy over Alphabet's ties to the Trump administration.

According to Lyft, this year saw the service complete its 500 millionth ride, and it is now available to 95 per cent of the USA population, up from 54 per cent at the beginning of the year.

There's a long history of technology companies investing in the next generation of upstarts. In 2014, it sent a fact-finding mission to the United Kingdom, "exploring opportunities in London and meeting with an array of political leaders and policymakers".

Lyft has gained market share in the United States this year as Uber suffered from executive turnover and self-inflicted wounds, including a protest over the company's ties to the Trump administration. But according to The Information, that may not be the case.

Bloomberg previously reported Alphabet was considering a $1bn investment.

Google was one of the early investors in Uber. That company is integrated into a number of Google products and services, from Google Assistant to Google Maps.

CapitalG's connection to Google raises questions about Waymo's position within the ride-hailing landscape, though, especially because the former Google X self-driving vehicle project has a partnership with Lyft already. It invested $258 million in Uber in 2013 but later it embroiled in a bitter lawsuit with the company over stolen trade secrets. This effectively ends all ties that it had with Uber. Former chief executive Travis Kalanick has spoken out about automation being an existential issue for the firm, since he believes that the first ridesharing company to acquire workable self-driving technology will be able to undercut its competitors and gain a rapid monopoly.

SoftBank, for example, is also a major investor in Didi, a ride-hailing company that was once a major competitor to Uber in China and is itself an investor in Lyft.

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