Forget Uber: How Lyft can win raising another $500 million for self-driving cars

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Last year, it seemed like the end was nigh. Rumors Lyft was trying to exit the market as it faltered against Uber made it seem the ridesharing wars were about to end. Travis Kalanick’s Uber would reign supreme and Lyft’s founders would limp across the finish line in a distant second place. 2017 has turned that thinking on its head and World War U has been reignited anew. Lyft is out for new capital while questions reverberate about Uber’s IP, company culture, and leadership. Indeed, Lyft might be about to win the pennant with a wildcard spot.

The Wall Street Journal first reported March 1 about Lyft’s new $500 million fundraising effort, not an unexpected development in the capital-intensive ridesharing industry but a timely one considering Uber’s PR near-collapse.

Lyft’s record is not totally clean. They too have been on the receiving end of legal wrangling over their services just like Uber. But thus far there haven’t been any cataclysmic blog posts about sexual harassment cover-ups at Lyft, no allegations they are stealing critical autonomous vehicle (AV) technology from the likes of Waymo, nor seeing their executives lose it at a frustrated company driver. Lyft also has not ignored local safety regulations on automated vehicles, as Uber arrogantly tested its cars on San Francisco roads despite several reports of running red lights.

Talk last year that Lyft was looking for a way out seemed to foretell the end, as even major suitor General Motors reportedly rejected an acquisition proposal (which led a $1 billion funding round in Lyft last year with half a billion bucks). Lyft is currently valued at $5.5 billion, and the new valuation according to the New York Times would be in line with the investment amount at $6 billion.

The pivot to AVs

A Chevrolet Bolt EV self-driving test car is displayed during a news conference at GM headquarters in the Renaissance Center in Detroit on Thursday, Dec. 15, 2016. GM will begin producing self-driving cars at a Michigan factory — and testing them on the state’s roads — in a step toward building the vehicles on a large scale, CEO Mary Barra said. (Photographer: Jeff Kowalsky/Bloomberg via Getty Images Israel)

While Lyft and its main rival have had trouble justifying investments based on an unprofitable taxi business, the prospect of developing autonomous technology and deploying it to save on labor costs or embedding it in other kinds of transportation has been a tantalizing one. Lyft Co-Founder and President John Zimmer predicted as much would be the case by 2021 in a manifesto named “The Third Transportation Revolution: Lyft’s Vision for the Next Ten Years and Beyond.”

Lyft illustrated timeline for rise of self-driving cars (John Zimmer via Medium)

“Once this happens — once autonomous networks provide better service at a lower cost — our country will pass a tipping point. And by 2025, owning a car will go the way of the DVD,” Zimmer asserted last year. When and if the age of human-driven cars comes to end is a matter of debate, but besides the point. Lyft will have its own test fleet of thousands of autonomous Chevrolet Bolt EVs to play with in 2018. Reuters says the fleet of cars — which will be dubbed Bolt AVs — will be the largest of its kind in history should it be deployed on time, easily surpassing Google and Waymo’s 60-strong battalion.

Lyft will at least in part benefit from the fact GM is handling a lot of the IP, much of it acquired from startup Cruise Automation in a $1 billion+ deal in mid-2016. With questions piling up about Uber’s technology, particularly if they will be financially liable to Waymo (owned by Google) for industrial espionage, Lyft is in a far more secure space with its General Motors backer and Cruise ally. The possibility that a new manufacturer partner could join Lyft’s team of investors is also very real.

Zimmer wrote on Medium last year that some self-driving tests were “marketing stunts,” though it wasn’t clear if he was explicitly referring to a rival like Uber or one of several other companies conducting experiments. Right now the marketing battle is being won by Lyft, which may be a harbinger to them winning the war.

 

 

1 COMMENT

  1. Do any of these globalists think about what to do with the millions of people they will throw out of work directly or in a cascading effect? They do, depopulation. But they don’t speak about it openly because it might create too much of a disturbance. This is why they, and the MSM, hate President Trump; he’s trying to save the bourgeoisie (middle class) from extinction.

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