Taxi-hailing app Lyft raises £760 million from Google parent Alphabet

Jon Howard
October 23, 2017

Lyft has had talks with investment banks about an initial public offering next year, according to two people briefed on the discussions, who asked to remain anonymous because the conversations are confidential. It has also been expanding its partnerships including with General Motors and the former Google Car unit now called Waymo.

That's still a fraction of Uber's market cap, which is somewhere between $50bn and $70bn, but it pegs the company as a major domestic competitor to the trouble-stricken cab firm. Looking to the future, Lyft said that less than 0.5% of miles traveled on US roads are done so by ridesharing networks, presenting a big opportunity for the company. Moreover, the startup announced that a partner at CapitalG, David Lawee, is going to join their board permanently. "The fact remains that less than 0.5 per cent of miles travelled in the USA happen on rideshare networks". As a result, this opened a huge opportunity for the firm to serve the country in many aspects that include social futures, environmental and economic futures. Both companies have looked for more sustainable means of outmaneuvering each other. After a series of scandals, including the resignation of CEO Travis Kalanick, Uber lost its application to renew its license to operate in London in September 2017.

Alphabet's investment ratchets up the high-stakes battle for supremacy in the ride-hailing industry.

CapitalG, the investment arm of Alphabet, was formed in 2013 under the name Google Capital.

"We will go public when it's right for us", said Lyft spokeswoman Alexandra LaManna.

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The clearest message from the new investment is simply that Lyft is, for the moment, playing the steadier tortoise to Uber's over-confident hare.

Investors trying to position themselves for the best returns have put money into competing entities, creating murky allegiances. And CapitalG is a sister company to GV, formerly known as Google Ventures, which is a major investor in Uber.

This year, Waymo sued Uber, alleging trade-secret theft, in a case that is set to go to trial in December. In addition to the latest round of funding, Waymo is partnering with Lyft on self-driving vehicles.

And that is not to forget Uber's own indiscretions against Google, or rather Waymo, Alphabet's self-driving auto R&D think-tank.

"CapitalG is honored to work with Lyft's compelling founders and strong leadership team", Lawee said in a statement.

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