Ever heard of the California based transport company ‘Lyft’? (That’s for reader outside the US basically because Lyft is actually an Uber competitor in the US). The company was launched back in June 2012 and operates in about 30 cities in US including New York, Los Angeles, and San Francisco. The ride hailing company has provided about 18.5 million rides per month and in April this year their net worth was valued at about $7.5 billion and has raised over $2.61 billion in funding.
Alphabet (Google’s parent company) is currently in talks with Lyft for a possible $1b investment in the company. This reminds us of Apple’s $1b investment in Uber’s Chinese rival Didi last year which may have contributed to Uber’s eventual demise in China. I brought this up because Lyft was in partnership with the Chinese Didi at the time so Uber selling to Didi was kind of a complex equation but in any case, Lyft has never been shy of showing its partnership with an Apple rival, Google.
Lyft and Google’s Waymo have a potential partnership for brining self-driving cars to the public space and now with talks of a $1b investment, the partnership looks to be growing stronger. Recently Lyft CEO made mention in August they are ready for an expansion which would see them enter into 40 more cities in U.S which could amount to a total coverage of over 94 percent of the US population with the major limitation being that Lyft does not have a strong international presence.
This partnership will give Lyft the needed boost in face of fierce competition from Uber. But maybe Alphabet is encouraged by recent growth Lyft has been experiencing probably because of Uber’s many self-inflicted crises. In the Uber February immigration crisis weekend alone, a Business Insider reports says,
“Lyft saw a more than 60% increase in passenger activations in the seven days following #deleteuber, a company representative said. In all, Lyft tallied 70.4 million rides in the first quarter. That was up 142% from the same period a year earlier. It was also up 36% just from the fourth quarter of last year, before all the drama started at Uber.”
In April, Lyft raised $600 million in funding which was mostly from large investment company and other large investment global funds which added to add raised the company’s value to about $7.5b (compared to Uber’s $70b) from its previous $5.5 billion a year earlier. The good news here is that Lyft looks like the better start up to invest in considering its plans to dive into the self-driving pool as well. This is because $1b would mean more to Lyft than Uber at this point.
This investment discussion between Alphabet and Lyft could very well go into 2018 according to sources familiar with the matter. But Lyft plans to go ahead raising funds pending when the discussions are finalised.