After having read the news article ‘Alphabet is leading a $1billion round in Lyft – despite being an investor in Uber’ (Balakrishnan, 2017), I believe it is time to blog about the two ‘kind of the same’ companies.
Both companies offer the same service: A ride when you need one. Uber, being worth $70billion, is still the largest of the two, since Lyft is ‘only’ worth $11billion. Alphabet, the mother company of Google, noticed the potential of Uber and its business model already in 2013. They invested $250mln in Uber at the time, and this got them a seat on the board.
However, yesterday the newspapers were full with the news that Alphabet now leads a $1billion investment round in Lyft.
So, what happened and what is the situation now?
In 2014, Alphabet gave its seat on the board of Uber, since they intended to compete in the ridesharing space with Uber in the future. This, of course, was inconvenient for Uber. After this, Uber has had to deal with several other incidents. Incidents about repeating sexual assault by drivers, but also with the incident of board member David Bonderman, who made sexist comments during a meeting (Maessen, 2017; Rawstorne, 2017). More recently, Uber had to deal with its CEO who resigned, hoping that the company would recover from the lost reputation under the lead of someone else (The Guardian, 2017).
Meanwhile, Lyft is getting the $1billion investment and the company benefits from a good reputation (Nu.nl, 2017). Nevertheless, the company is still only available in the USA, but is becoming a serious competitor of Uber. Especially after the investment lead by Alphabet and the announcement that Alphabet want to partner with Lyft on a self-driving car project (Isaac, 2017).
All this makes me wonder whether we will soon be ordering Lyfts instead of Ubers in Europe as well. I always looked at Uber as a company that was never going to give up the spot it created in the taxi market, but after reading all this, I might have been wrong…
Balakrishman, A. (2017). ‘Alphabet is leading a $1billion round in Lyft – despite being an investor in Uber.’ CNBC.com. Accessed: 23 October 2017 at https://www.cnbc.com/2017/10/19/lyft-funding-alphabets-capitalg-leading-1-billion-dollar-round.html
Isaac, M. (2017). ‘Lyft and Wymo reach deal to collaborate on self-driving cars.’ The New York Times. Accessed: 23 October 2017 at https://www.nytimes.com/2017/05/14/technology/lyft-waymo-self-driving-cars.html
Maessen, L. (2017). ‘Andere topman Uber stapt op na seksistische grap.’ NRC.nl. Accessed: 23 October 2017 at https://www.nrc.nl/nieuws/2017/06/14/andere-topman-uber-stapt-op-na-seksistische-grap-a1562925
Rawstorne, T. (2017). ‘How safe is Uber? Growing concern as police figures suffest company’s drivers are linked to one sex attack in London per week.’ Daily Mail. Accessed: 23 October 2017 at http://www.dailymail.co.uk/news/article-4741030/Figures-Uber-drivers-linked-one-sex-attack-week.html
