Alphabet (NASDAQ:GOOGL), the parent company of Google, has been looking to invest $1 billion in the ride-sharing start-up Lyft. Although the deal is currently in the works, there is talk that Alphabet's self-driving car unit, Waymo, is looking to collaborate on autonomous-vehicle technology with Lyft after their ties with Uber fell through.
Initially, Alphabet's venture capital arm, GV, invested in Uber; however, the two companies are now engaged in a lawsuit over stolen trade secrets. Waymo claimed that an engineer who left the company to work for Uber shared information concerning self-driving car technology. Uber has also been hit with several other high-profile lawsuits and at least three U.S. probes.
To date, Lyft has raised over $2.5 billion in funding from backers such as General Motors, Carl Icahn, and Andreessen Horowitz, among others. This capital was used to launch a major television campaign starring Jeff Bridges in which Lyft's car services were offered across more than a dozen new U.S. cities. Currently, Lyft is focusing on controlling its spending and co-founder John Zimmer has commented that ensuring Lyft's independence is a top priority. Alphabet's investment comes at a crucial time because, according to Bloomberg, Lyft has held conferences with several potential acquirers in the last year. An additional $1 billion, Lyft woult not only maintain its independence but also embark on larger projects and eventually surpass Uber, its much bigger rival, in terms of market shares.
Talks of the investment are driven by top-level executives at Alphabet, and the investment could come from either Google or Capital G, Alphabet's private-equity arm. Since the deal is not yet set-in stone, it could fall through. However, this investment could greatly benefit both Alphabet and Lyft. Since Lyft announced that it would begin developing a "core" division centered around autonomous vehicles, this would give Alphabet an additional boost in the market. As of now, both Alphabet and Lyft are laying low regarding the deal and not revealing too many detail, but this is definitely something to watch out for in the near future.