Watch out Uber (UBER), because Google, now known as Alphabet (GOOG) (GOOGL) might buy Lyft (LYFT) eventually. Alphabet is in conversations with Lyft about a potential massive add on investment in recent weeks, signalling strong support for Uber’s biggest competitor.
An investment of about $1 billion in Lyft may come from Google or CapitalG, Alphabet’s private-equity arm. While it is a rumor, a deal may not come together. Alphabet and Lyft declined to comment. Google is interested in this space, likely for the self driving side of the equation. Alphabet is also an Uber shareholder through its GV venture capital arm, but Waymo, a unit of Alphabet, is currently suing Uber over self-driving car technology. As the relationship has deteriorated, Waymo signed a partnership with Lyft to work together on testing autonomous vehicles.
While Lyft has recently focused on controlling spending, the cash would allow the San Francisco-based startup to pursue more aggressive growth with subsidies for drivers, discounts for riders and marketing. Lyft kicked off a major television campaign this month that stars Jeff Bridges.
With an extra $1 billion, Lyft would be able to ensure its independence for the near future, something co-founder John Zimmer has said is a priority. But some investors have suggested Alphabet would be a natural home for the ride-hailing startup. Lyft held informal talks with Alphabet and other potential acquirers last year but didn’t pursue a sale.
Lyft has gained market share this year as Uber has bent under a series of self-inflicted scandals. Uber faces at least three U.S. probes and several high-profile lawsuits. Dara Khosrowshahi, the former Expedia Inc. chief executive officer, took over as Uber’s new chief last week. He’s looking to complete a fundraising deal of his own: Uber is advancing on an investment from SoftBank Group Corp. and others of as much as $12 billion, most of which would allow existing shareholders to cash out.