Alphabet flirts with Lyft: Google parent may invest $1 billion

CERT-LatestNews ThreatsEconomic ThreatsStrategic Uncategorized

Lyft’s war chest may get a $1 billion boost thanks to Google parent company Alphabet, Bloomberg reports.

Alphabet has been in talks with Lyft about a potential investment, which could come from Google or CapitalG, Alphabet’s private equity arm, anonymous sources familiar with the matter told Bloomberg.

If the deal goes through, the cash infusion would come as Lyft is capitalizing on larger rival Uber’s series of embarrassing stumbles and setbacks. Uber recently kicked out CEO Travis Kalanick and replaced him with Dara Khosrowshahi after slew of allegations of sexual harassment, sexism and other inappropriate behavior within the company. Uber also reportedly is under federal investigation for its “Hell” program it allegedly used to spy on Lyft drivers, and its “Greyball” software used to evade regulators in cities where it wasn’t allowed to operate.

Get tech news in your inbox weekday mornings. Sign up for the free Good Morning Silicon Valley newsletter.

Meanwhile, Lyft has been expanding quickly. Last month Lyft said it now serves 94 percent of the U.S., including the entirety of 40 states.

But an Alphabet investment in Lyft also could further complicate an already dicey web of relationships between Lyft, Alphabet and Uber. Alphabet already is an Uber shareholder, but that relationship turned south this year when Google’s self-driving car spinoff, Waymo, sued Uber for trade secret misappropriation. And Waymo teamed up with Lyft in May to test autonomous vehicle technology.

Meanwhile, SoftBank reportedly is in talks to invest as much as $10 billion in Uber — a deal that has been rumored to be in the works for weeks, but which threatens to lower Uber’s nearly $70 billion valuation. The Japanese corporation is proposing to scoop up between 17 and 22 percent of Uber, partly by buying shares from existing investors, The Wall Street Journal reports. But the offer would be at a discount of 30 percent or more from the company’s current valuation.

Amid Uber’s struggles, several investment funds already have marked down their shares in the company by as much as 15 percent — bad news as the startup gears up for an eventual IPO. Khosrowshahi says Uber’s public market debut could come in as little as 18 months.

Photo: A Lyft driver and passenger talk during a ride. (Courtesy of Lyft)

Tags: , , , ,

Alphabet flirts with Lyft: Google parent may invest $1 billion