Lyft Raises $1 Billion From CapitalG, Finding an Ally in Alphabet

Lyft Raises $1 Billion From CapitalG, Finding an Ally in Alphabet

Alphabet’s investment ratchets up the high-stakes battle for supremacy in the ride-hailing industry. Lyft has drafted off a series of high-profile stumbles that rival Uber has undergone since the beginning of the year. Uber is dealing with at least five separate federal inquiries into its business practices. A group of investors also forced out Travis Kalanick, Uber’s co-founder and former chief executive, this year following concerns that he was not fit to lead the company.

Uber, which has since appointed a new C.E.O., is now trying to turn around its corporate culture while nearing a deal to sell a significant stake of itself to SoftBank, a Japanese conglomerate, which would include about $1 billion in new capital.

The allegiances of investors in the ride-hailing industry are murky. SoftBank is also a major investor in Didi, a ride-hailing company that was once a major competitor to Uber in China. Didi is also an investor in Lyft. And CapitalG is a sister company to GV, formerly known as Google Ventures, which is a major investor in Uber.

Those relationships are further complicated by how Uber is dealing with a lawsuit filed by Waymo, the self-driving-car unit that is owned by Alphabet. Waymo has accused Uber of stealing trade secrets through a former Google employee.

Lyft must also balance a delicate relationship between itself and a group of technology partners who are working with it on self-driving technology. In July, Lyft unveiled a large Silicon Valley headquarters for its “Open Platform Initiative,” a coalition of automakers and technology start-ups that are working together to build software for autonomous vehicles. That group includes partners such as General Motors, Ford and Nutonomy, as well as Alphabet’s Waymo.

“Ridesharing is still in its early days,” Mr. Lawee, a partner at CapitalG, said in a statement. “We look forward to seeing Lyft continue its impressive growth.”

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