Ridesharing, more specifically, the fate of Uber and Lyft, is at the top of the potentially disrupted list as autonomy approaches. Both of these companies will need to make the leap to autonomy whether it be organically, through acquisition, or by partnership. simply put these companies must adopt autonomy to survive. Recent news of CapitalG leading a $1B investment in Lyft is a key endorsement that Lyft will have a future in an autonomous world as the platform for on-demand self-driving vehicles. Uber’s fate, however, appears more in its own hands, given it is developing its own autonomous systems, and the partnerships that Uber has inked to date tend to be on the manufacturing side (Daimler, Volvo, Tata, and Toyota). While Uber is still in the running, our money is also on Lyft.
CapitalG, Alphabet’s late-stage venture fund, has not disclosed how much of the round they account for. Despite a CapitalG spokesman saying otherwise, this investment is about much more than making a profit for Alphabet. As Google navigates the impossibly complex landscape of companies vying for leadership in ridesharing and autonomy, they are making sure they have a strong presence in each possible outcome of the booming technology.
GV, another venture arm of Alphabet that invests in much younger companies, made a $258M investment in Uber in 2013 predating the Waymo IP theft allegations). On top investments in of both ride-sharing giants, Alphabet’s own Waymo is largely considered a leader in self-driving systems. We see this strategic investment as a strong confirmation of Google’s conviction in the future of self-driving cars, and the concept of fleet services. In our Auto Outlook, we detail the rise of both autonomous vehicles and fleet ownership, predicting fully autonomous cars to outnumber drivers and cars owned by fleet services to outnumber personally owned cars in 2036.
The investment brings Lyft’s valuation north of $11B, almost 50% higher than last round. While Lyft remains roughly 1/7th the size of Uber, a large influx of cash should strengthen their competitive efforts, allowing them to expand internationally, and to build out their platform for self-driving cars. While Lyft does not have any aspirations of developing their own autonomous systems, they have positioned themselves as the platform for on-demand autonomous cars in the near future. With Lyft’s open platform, automakers can plug self-driving cars into a network of drivers that make over 1 million rides per day (growing in excess of 100% per year), and smooth the transition to full autonomy with a Lyft “driver” behind the wheel. While Uber, who hopes to develop self-driving technology in-house, is embroiled in legal battles, Lyft has made countless partnerships with both automakers and self-driving tech companies. Their list now extends to Waymo, NuTonomy, Drive.ai., Ford, GM, and Jaguar. The next chapter in the race to autonomy will likely be a Lyft IPO. Stay tuned.
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