Lyft gets US$1bn from Alphabet to rev up challenge to Uber

On Wednesday, Recode reported that the speculation was correct, and Google's parent company is leading a $1 billion round of investment that raises Lyft's valuation to $11 billion.

Alphabet's Lyft investment shows that the biggest companies in the self-driving space are happy to spread their money and attention out for multiple projects that are ostensibly working toward the same goal.

"Ridesharing is still in its early days and we look forward to seeing Lyft continue its impressive growth", said David Lawee, a CapitalG partner who will join the company's board.

Lyft has gained market share in the U.S. this year as Uber suffered from executive turnover and self-inflicted wounds, including a protest over the company's ties to the Trump administration.

Google's self-driving vehicle spin-off Waymo is suing Uber in federal court, alleging that its former ally recruited some of its top engineers as part of an elaborate scheme to steal its trade secrets. GM president Dan Ammann told Reuters that any further plans to collaborate with Lyft were "not defined at this time".

The funding marks a major shift in Alphabet's allegiances away from Uber, and suggests a tighter pairing of its Waymo autonomous vehicle technology with Lyft's transportation network. However, the relationship between the two companies started as far back as May of this year.

Spokespeople for Lyft and Alphabet have said the latest investment will not have any bearing on the Waymo partnership.

For the U.S. unicorn, the latest round not only provides an injection of capital, but also strengthens its ties with Alphabet. Those tensions prompted one of Google's top executives, David Drummond, to resign from Uber's board a year ago. It invested $258 million in Uber in 2013 but later it embroiled in a bitter lawsuit with the company over stolen trade secrets. It is nearing a deal to sell a significant stake of itself to SoftBank, a Japanese conglomerate, which would include about $1 billion in new capital. It also claims to have completed its 500 millionth mile.

The new investment creates a potential conflict for Alphabet, which was one of the early investors in Uber. Lyft's losses stood at $600m, but later the company stated that it would become profitable by 2018.

"We will go public when it's right for us", said Lyft spokeswoman Alexandra LaManna.

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