Uber rival Lyft steps up competition by getting $500m in new funding

The financing has given Lyft a $2.4bn increase in value since the company last raised money in 2016

Lyft is being bolstered by the woes at Uber, which has been dealing with scandals involving the company’s workplace culture and aggressive leadership team (Reuters)

For years, Lyft has trailed its larger rival Uber in the battle to conquer the ride-hailing market. More recently, Lyft has gotten a boost.

The smaller ride-hailing company has secured up to $500m (£402m) in a new round of funding that values Lyft at $6.9bn before the addition of new capital, according to two people briefed on the discussions who asked to remain anonymous because the details were confidential. The privately held company may raise an additional $100m, these people said.

The financing gave Lyft a $2.4bn increase in value since the company last raised money in 2016.

It was not immediately clear which investors were participating in the new financing. Lyft’s previous investors included venture capital firm Andreessen Horowitz and Chinese e-commerce company Alibaba.

A Lyft spokesman declined to comment on the financing, which was earlier reported by the Financial Times.

Lyft is being bolstered by the woes at Uber, which has been dealing with scandals involving the company’s workplace culture and aggressive leadership team.

A grass-roots movement to boycott Uber has sprung up around the country, with the hashtag #deleteuber, related to the company’s shortcomings, spreading quickly across Twitter .

Lyft has been trying to capitalise on the stumbles of its opponent. The company has shown investors a recent surge in ride requests, buoyed by Uber’s negative publicity. It has also presented itself as a kinder alternative to Uber.

In an interview with Time last month, Lyft’s president, John Zimmer, said of Uber’s problems: “We’re woke.” He added that Lyft, in contrast to Uber, was “a better boyfriend”.

Uber has rejected assertions that its business has been materially affected by its troubles. The company has said its growth over the first 10 weeks of 2017 was larger than the same period in 2016, and trips in less mature regions like Latin America were up 600 per cent from a year earlier.