Lyft announced on Thursday that Alphabet’s CapitalG led a $1 billion funding round, the most recent in company history. Now valued at $11 billion, Lyft and its close ties to Google might represent bad news for Uber, which remains the more valuable of the two firms.
The ride-hailing empire is quickly intertwining itself with the rise of self-driving technology, an integration that both companies are pursuing. Big automakers like GM, Ford, and Mercedes are well on their way to catch up with autonomous systems, while others like Tesla have their own successful approach.
Google and Lyft warming up to each other might prove beneficial to both parties involved, as it has proven in the past with Waymo offering rides along with Lyft to select customers. The tech giant was previously close to Uber, but a lawsuit earlier this year over Waymo’s trade secrets put an end to that relationship.
Lyft is slowly but safely gaining on Uber
After this last funding round, Lyft is worth $11 billion according to market estimates, while Uber is still on top at a comfortable $70 billion valuation last time we checked.
This translates not only to more acquisition power, widespread presence, and larger revenue margins; it also means that they get to invest more to remain at the top. However, Lyft is closing in, slowly yet with a firm step.
The main competitor to Uber has gained more and more ground across the country as Uber struggles with corporate rearrangements and internal policy changes necessary to drive a stable work environment.
Still, Lyft continues to be a local service to the United States, while Uber has already expanded to more than 70 countries and failed to break ground in China. A Google partnership could significantly increase their chances to succeed overseas, and that is only with funding.
The race to create a self-driving taxi fleet just took a bizarre turn with a $1 billion bet on Lyft led by Alphabet https://t.co/59TY3UZH6C pic.twitter.com/TyM56M42du
— Tech Insider (@techinsider) October 19, 2017
Could Google and Lyft topple Uber?
When you turn heads at the who’s who in the self-driving industry, Google’s Waymo stands tall above most. The company makes no noise but delivers like no other, being the startup with more test miles accumulated when compared to the competition.
Waymo could be so successful on its own, in fact, that experts recently valued it at more than the current worth of Lyft. A tighter partnership between the two could not only expand the ride-hailing company’s fleet significantly but also give each unit some of the most advanced autonomous systems in existence.
Of course, this being Google and Alphabet, they are taking a slow and steady approach until they have something concrete readily developed. Lyft gained more than just $1 billion on Thursday; it also gained a new board member straight out of CapitalG, meaning stakes are getting higher for tech giants looking ahead.