Brief:

• Alphabet, the holding company that owns search giant Google, is said to be considering an investment of about $1 billion in Lyft, the ride-hailing company that is the chief U.S. competitor to Uber, Bloomberg News reported, citing unnamed sources. A deal isn’t entirely certain, and Alphabet and Lyft declined to comment.
• Alphabet also owns a stake in Uber through its GV venture capital arm. Waymo, another unit of Alphabet that's developing self-driving cars, sued Uber over the technology. As the relationship has broken down, Waymo partnered with Lyft to test autonomous vehicles. Lyft had informal talks with Alphabet and other potential acquirers last year but didn’t pursue a sale.
• Lyft could use the additional investment to be more aggressive in marketing and providing subsidies for drivers and discounts for riders, per Bloomberg. Earlier this month, the company launched its first TV campaign starring actor Jeff Bridges. 

Insight:

Lyft has been successful in gaining market share as Uber got bogged down in scandals that damaged the brand and even inspired a boycott movement. Travis Kalanick, Uber's founder, left his job as CEO in June after investors pressured him to leave, The New York Times reported. Dara Khosrowshahi, the former CEO of Expedia, took over as Uber’s new chief this month.

While Uber has been an important innovator in mobile and a key way for brands to reach mobile users via co-promotions, the news of Alphabet's possible investment in Lyft underscores how the mobile ecosystem continues to evolve. Brands have been partnering with Lyft as well and an investment from Alphabet could mean the company will have additional resources for building out its platform on the marketing side.  

As self-driving technology becomes more advanced, the ride-sharing industry is expected to embrace the innovations as a way to cut costs of subsidizing drivers. Lyft could potentially be a key part of Alphabet’s push to integrate its mapping and search technology into the transportation industry. Lyft closed a $500 million financing round in April with support from private equity firm Kohlberg Kravis Roberts, a potential signal that the company and its future endeavors are supported by independent parties.

Meanwhile, Uber reportedly is in talks with SoftBank about an investment of more than $10 billion that may let existing investors and employees cash out. The investment would help Uber to expand in regions like Southeast Asia and Latin America, per WSJ. If no agreement is reached, SoftBank might consider investing in Lyft, unnamed sources told the newspaper.