In a new development that would definitely come as a bit of a shock for Uber, tech behemoth Alphabet Inc. has led a fresh investment round worth $1 billion for rivals Lyft. It is important to note that Alphabet is a major backer of Uber as well and following the disputes between the two companies over driverless car technology, this might not be much of a surprise. The news about the fresh round of investments was revealed by Lyft in a blog post.
Alphabet's big bet
The investment in Lyft is without a doubt, a significant investment for Alphabet and the collaboration will definitely help them in their intense competition with Uber for market share.
Even more importantly, Lyft will be able to use the considerable technical expertise at Alphabet's disposal to gain an edge in a market in which they want to make a considerable headway in the coming years.
The fresh injection of funds is going to go towards expanding their footprint in the United States market considerably so that they can keep chipping away at Uber's share of the market. Over the past few months, Lyft has made giant strides but as far as competition is concerned it has still not been able to offer Uber any serious competition. However, Alphabet's involvement in the company appears to be a game changer of sorts. According to a report by Bloomberg, Alphabet's investment arm Capital G led the round of investments and one of the partners at Capital G, David Lawee will now become a member of Lyft's board of directors.
A key collaboration
In addition to helping Lyft with a war chest, the collaboration is also going to provide Lyft with access to Alphabet's autonomous vehicle technology Waymo and that could prove to be one of the biggest gains for the company. The access to Waymo will definitely provide Lyft with an edge that could well prove to be a key factor in its fight with Uber for the United States market.
Over the course of the year, Lyft has gained a lot of momentum due to the controversies and corporate intrigue that has gone on at Uber, which is why this recent development must not come as a pleasant news for Uber's new CEO Dara Khosrowshahi.
Uber, on the other hand, is on the verge of finalizing a large investment from SoftBank and it is still expected to rule the roost in the near future.
However, at the same time, it must be pointed out that the company has never faced such well-funded competition in the United States in the past and hence, it must also brace for a long drawn out battle for supremacy.
