Published on October 21st, 2017 | by Steve Hanley0
Alphabet Pokes Uber In The Eye With $1 Billion Investment In Lyft
October 21st, 2017 by Steve Hanley
This story about Alphabet making a major investment in Lyft was first published by Gas2
It has been a turbulent year for Uber. Faced with multiple allegations of a company-wide culture that condones sexual harassment, founder Travis Kalanick was forced to relinquish his position as CEO. London has revoked permission for the company to do business within the city, a controversy that is now being litigated in court.
Alphabet, the parent company of Google, was an early investor in Uber, but that relationship soured when Waymo, the division of Alphabet that is focused on developing self-driving cars, sued Uber, claiming it had taken advantage of proprietary information illegally obtained by Anthony Levandowski.
Waymo says Levandowski downloaded thousand of pages of documents on his way out the door in late 2015 and that he used that information to form Otto, a startup that specialized in self-driving software for long-haul trucks. Uber acquired Otto shortly thereafter and allegedly used the documents purloined by Levandowski to further its own autonomous driving program.
Lyft is currently far behind Uber in customers. While Uber is international, Lyft currently operates in only 40 US states. It has just completed a funding round led by CapitalG, the growth investment fund of Alphabet. CapitalG has also backed private app-based companies such as Airbnb. Alphabet invested $1 billion in Lyft as part of that funding round.
“Ridesharing is still in its early days and we look forward to seeing Lyft continue its impressive growth,” said David Lawee, a CapitalG partner who will join the company’s board. An initial public offering by Lyft is rumored, but the success of this latest funding round may have pushed any IPO further into the future. Lyft has now raised a total of $11 billion since its inception.
Telling the players in the ride-hailing and self-driving industry apart is difficult without a scorecard. Waymo has forged a partnership with Chrysler to manufacture 100 Pacifica Hybrid vans equipped with self-driving technology. General Motors invested $500 million into Lyft last year. It is partnering with Lyft to test fleets of self-driving Chevy Bolts in major cities.
GM also bought Cruise Automation — a self-driving technology startup — for $1 billion last year. Alphabet still has money tied up in Uber, but may be able to cash out its investment in the next few weeks if a $10 billion deal between Uber and SoftBank is completed.
If there is a takeaway from all this, it is that some people think that there is a lot of money to be made from combining autonomous cars and ride-hailing services. We’ve been calling such potential cars robotaxis. Google, with its various branches, divisions, and subsidiaries, has every intention of being right in the center of that market. It appears Google has decided to throw its lot in with Uber’s competitors, which can’t be good news for Uber.
Grab your popcorn. This fight could be epic.
Source: The Telegraph