The ride-hailing market

The ride-hailing market

The ride-hailing market has witnessed surge since technology came into the fold. The two major players Uber and Lyft, however, don’t seem to be making any profits, mostly because of a lack of a proper business model. The third quarter of the year 2019, saw Uber losing $1.2 billion.

Now, the ride-hailing market has grown more complicated as Lyft announced on Thursday that it had raised $1 billion from CapitalG, the growth investment branch of Google’s parent company Alphabet. According to Lyft, the new cash infusion has increased the company’s value to $11 billion.

This investment from Alphabet points towards the company’s alliance in the ride-hailing market. In 2013 Google Ventures made its most substantial investment in the form of $250 million in Uber. David Drummond, Alphabet’s head of corporate development, even joined the Uber board. In a 2016 Bloomberg Television interview, Google Venture CEO, Bill Maris, revealed that the company’s total investment in Uber surpassed $300 million.

Moreover, as Uber started developing its autonomous vehicles, the speculations for the two companies to partner up rose—until the alliance fell apart.

In February, Google’s self-driving car spin-off Waymo sued Uber for allegedly stealing its intellectual property and using it to go ahead with autonomous cars. Soon, Drummond left the Uber board as the relationship began to get sour between the two companies.

Soon after, Waymo started getting closer to Lyft. May 2019 saw both the companies announcing a co-project, which is likely to launch in Arizona later this year. Besides working on a pilot project with Waymo, Lyft was the only ride-hailing company to be named in Alphabet’s Sidewalk Labs Toronto project this week.

The fact that CapitalG has made such a significant investment means Alphabet is looking for more than a partnership and is willing to bet on Lyft’s future growth. CapitalG’s David Lawee will be taking the board seat as a part of the deal.