Alphabet Inc (NASDAQ: GOOGL) is reportedly considering a major investment in Lyft Inc. According to Bloomberg, Google or CapitalG, Alphabet’s private-equity arm may invest plans to invest $1 billion in Lyft, which is Uber’s strongest competitor in the United States.
Google’s interest in Lyft can be explained by Lyft’s ambitious pursuit of autonomous vehicle technology. Lyft announced last year that the company is aiming to have self-driving cars as a majority of their fleet. Such a major investment, if becomes reality, will help Lyft achieve their goals.
“Last January, Lyft announced a partnership with General Motors Company (NYSE: GM) to launch an on-demand network of autonomous vehicles. If you live in San Francisco or Phoenix, you may have seen these cars on the road, and within five years a fully autonomous fleet of cars will provide the majority of Lyft rides across the country,” said John Zimmer, Lyft co-founder, on Medium.
The idea is that owners of electric cars will rent them. Lyft will remain a ride sharing company for all intents and purposes, but with a futuristic fleet.
“For starters, our fleet will provide significantly more consistency and availability than a patchwork of privately owned cars. That kind of program will have a hard time scaling because individual car owners won’t want to rent their cars to strangers. And most importantly, passengers expect clean and well-maintained vehicles, which can be best achieved through Lyft’s fleet operations,” Zimmer added.