Google Parent Alphabet Adds To Uber's Problems With Rumored $1 Billion Investment In Lyft
Google parent Alphabet may become an even bigger thorn on the side of Uber as it is reportedly considering to make a $1 billion investment into Lyft, Uber's biggest rival in the ride-hailing space.
If the investment pushes through, it will add to the already-heavy plate of problems of Uber and its new CEO.
Alphabet Mulling $1 Billion Lyft Investment
Alphabet has discussed a potential investment with Lyft over recent weeks, showing strong support for Uber's biggest competitor in the United States, according to a Bloomberg report.
The investment, which could come from Alphabet's private equity arm CapitalG or Google itself, will be about $1 billion. Alphabet and Lyft declined to comment on the report regarding the rumored investment, though sources who wished to remain anonymous said that there is a chance that the deal would not push through.
Alphabet has actually been an investor in Uber through GV, its venture capital arm, since 2013. However, the partnership has deteriorated, opening up the chance for Lyft to receive a possible investment from Google's parent.
What A $1 Billion Investment Would Mean For Lyft
Lyft has recently shifted its focus to controlling its spending, but a $1 billion investment would allow the ride-hailing startup to pursue more aggressive growth through initiatives such as driver subsidies, rider discounts, and marketing programs such as its major television campaign starring Jeff Bridges.
A $1 billion investment from Alphabet will assure that Lyft would remain independent for the near future, though it could also mean that Google's parent is building the foundation for a possible acquisition.
Uber's Growing Problems
Uber's second quarter results turned out well despite all the drama that it is facing primarily due to sustained growth in gross bookings revenue and global ride requests. However, if Lyft receives a $1 billion in investment, Uber might quickly see that advantage vanish as its rival's coffers would likely become big enough for various initiatives to close the gap.
The rumored investment in Lyft highlights the broken relationship between Google and Uber, as Waymo, Alphabet's self-driving unit, is currently locked in a legal battle against Uber over allegations that Anthony Levandowski stole 14,000 files from Waymo before resigning and then used them for the development of the self-driving technology of Uber.
While the Waymo vs. Uber legal issues rage on, the ride-hailing service is facing a variety of other problems as new Uber CEO Dara Khosrowshahi, the former CEO of Expedia, took over from Travis Kalanick.