Alphabet: Google parent company considers $1bn investment in Uber rival Lyft

Discussions could see Google or private equity firm CapitalG invest in Lyft

Alphabet is growing closer to Lyft as its relationship with Uber breaks down (Reuters)

Alphabet, the parent company of Google, has held conversations with Lyft about a potential investment in recent weeks, signalling strong support for Uber’s main US competitor, according to people familiar with the matter.

An investment of about $1bn (£740m) in Lyft may come from Google or CapitalG, Alphabet’s private-equity arm, said some of the people, who asked not to be identified because the discussions are private. A deal may not come together. Alphabet and Lyft declined to comment.

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 $1bn, 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 did not 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 US probes and several high-profile lawsuits.

Dara Khosrowshahi, the former Expedia chief executive, took over as Uber’s new chief last week. He is looking to complete a fundraising deal of his own: Uber is advancing on an investment from SoftBank and others of as much as $12bn, most of which would allow existing shareholders to cash out.

Bloomberg