Google Parent Alphabet Leads $1 Billion Funding In Lyft
The global mobility on-demand market is expected to exceed $228 billion by 2022 as Lyft tries to seize the moment from rival Uber.
Ride-hailing app Lyft has secured a $1 billion funding round from CapitalG, the investment fund run by Google parent Alphabet, as the company seeks to capitalize on the rise of on-demand as its rival Uber works to recover from its various executive controversies and turmoil of the past year.
In a blog post on Lyft’s site, the company added that CapitalG Partner David Lawee is being added to the ride-hailing app’s board.
The deal suggests a growing shift in favor of Lyft by Google, which is also an investor in Uber. The move toward Lyft comes several months after Alphabet’s self-driving car subsidiary, Waymo, began partnering with Lyft on autonomous vehicles. Alphabet and Uber have been involved in a battle over intellectual property over the development of sensors for self-driving cars during the past year.
And while Uber is still the number one ride-hailing service, despite being banned from London, Lyft points out that this past year has been very successful. In its blog post, the company notes that that its service is now available to 95 percent of the U.S. population — up from 54 percent at the beginning of the year.
“While we’ve made progress towards our vision, we’re most excited about what lies ahead. The fact remains that less than 0.5 percent of miles traveled in the U.S. happen on rideshare networks,” Lyft’s statement says. “This creates a huge opportunity to best serve our cities’ economic, environmental, and social futures.”
Lyft has also been aggressively courting marketing partnerships with brands such as Taco Bell. The two collaborated on a “taco mode” campaign this past July.
Before that, General Motors’ app-based Maven program, is now in about 20 cities across the U.S. and Canada, struck a deal with Lyft in Atlanta as the auto brand seeks to expand the year-old car-sharing effort. A year ago, Lyft and Jet Blue also partnered to bring travelers service from the airport their their door.
As the role of geo-data supports the connection between online and offline, the auto industry will be at the center of the changing interactions between places of business and consumers. And that’s what underlies this funding in Lyft right now.
Carmakers’ future success will be measured in “miles traveled” as opposed to the number of cars actually sold, Adam Jonas, head of global auto research for Morgan Stanley, has opined in a study of the impact of driverless and connected cars will have on the automotive industry.
By 2030, cars will drive more than 19.6 billion miles globally — considerably higher than the 10.2 billion they traveled in 2015, Jonas has estimated. It’s worth noting that the pace of growth is much higher than the estimated production of cars and light vehicles during the same period.
“The natural solution appears to be more shared vehicles,” Jonas said. “Shared cars—taxis and cars operated by ride-sharing companies, but not car rental—in 2015 accounted for 4 percent of global miles traveled, but by 2030, Morgan Stanley estimates that number could reach 26 percent.”