Lyft Inc., an upcoming competitor of Uber, has tied up with automobile company Jaguar to work on a self-driven car for their ride sharing services. As far as the financial aspect is concerned, an investment of $25 million by the former in the latter is also involved, post which Lyft is valued at $7.5 billion. As recently as last month, Lyft partnered with Waymo, Google’s self-driving car project. Lyft has also partnered with General Motors and a start-up named NuTonomy for similar projects. Thus, the organisation is building multiple allies in order to ensure that it has strong footholds to innovate and be an early bird in utilising newer technology in order to grow further.
About Lyft Inc.
Founded in San Francisco, United States in 2012 by entrepreneurs Logan Green and John Zimmer, Lyft has been picking up pace and is competing with the much larger Uber Technologies Inc. The co-founders first launched Zimride in 2007 which was oriented towards carpools for long distance trips. The need for shorter rides within the city led to the birth of Lyft which now operates in 251 cities in the US and is expanding further. Lyft is privately held and saw a 250% jump in revenue and a loss of $600 million as of January 2017 primarily due to discounts and promotional expenses.
A dash of technology, an infusion of funds and an association with a big name such as a leading subsidiary of the Tata Group is the perfect recipe for becoming a bigger and better player in the industry. The deal sweetener here is the slipping of competition. Given the turbulent times which Uber is going through due to culture and workplace sexual harassment concerns, it is the right time for Lyft to capitalize on the fact that one of its major competitors might go through a management restructuring, in order to up its own game in the industry. Also, Waymo has sued Uber in spite of the fact that its parent company, Alphabet Inc., is an Uber investor. With this backdrop, the timing of the deal could not have been better.