Alphabet Considering Investment in Lyft of $1 Billion

Alphabet Inc. has been holding conversations with Lyft Inc. the ride-hailing company about a possible investment, which signals strong support for the main competitor of Uber Technologies, said those familiar with the current situation.

An investment of approximately $1 billion in the company might be from Google or CapitalG, the private equity business of Alphabet, said the sources who requested anonymity. A deal might not even come to fruition, said one of the sources. Lyft and Alphabet both declined to make any official comment about the matter.

Alphabet is currently a shareholder at Uber as well through its venture capital company GV, but Waymo, an Alphabet unit is currently suing Uber for technology for self-driving vehicles.

While the relationship was deteriorating, Waymo signed a pact with Lyft to be a partner on the testing of autonomous vehicles.

Recently Lyft has been focusing on controlling its spending, as the cash would give the startup the chance to pursue more growth with subsidies for its drivers, discounts for its riders and marketing. The company launched a big TV campaign in September that stars Jeff Bridges.

With another $1 billion in hand, Lyft could ensure its independence during the near future, something John Zimmer its co-founder said was a priority.

However, some investors suggested that Alphabet would be the natural home for the company. Lyft was in informal talks with Alphabet along with other possible suitors in 2016 but a sale was not pursued.

Lyft’s market share has increased during 2017 as Uber has suffered from an image crisis due to several scandals of which most if not all were self-inflicted. Uber is facing a minimum of three probes by U.S. authorities and a number of high-profit lawsuits.

The former CEO at Expedia Dara Khosrowshahi took the reins at Uber last week. He is looking at completing a deal of fundraising of his own.

Uber is nearing an investment from Japan-based SoftBank Group as well as other for the reported amount of more than $12 billion, of which it would allow the existing shareholders of the business to all cash out.

Ride hailing services have exploded on the scene the last couple of years with Uber and Lyft currently the two largest in the U.S. The services link drivers with riders through an app online and prices for rides are much less expensive than normal taxi fare.

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