Waymo, the self-driving car unit of Google, and ridehailing company Lyft have announced a strategic partnership. The two companies will work together to develop products and tech for autonomous vehicles, using their combined resources to compete with ridehailing powerhouse Uber.
For both parties, the benefits seem clear: Lyft's existing network and infrastructure will expose Waymo's technology to more markets, while Waymo's tech will help Lyft keep pace with its rivals in the self-driving space.
On the heels of its ongoing lawsuit with Uber, the deal only further cements Waymo's place at the nexus of the ridehailing industry. The announcement of its agreement with Lyft on Monday preceded a judge's announcement later in the morning that Uber could continue its work on autonomous vehicle tech—as long as lead engineer Anthony Levandowski doesn't participate in the efforts.
This is not the first partnership for either company. Lyft previously teamed with Didi Chuxing and Grab in what was once dubbed an “international ride-hail alliance,” but that idea crumbled following Didi’s acquisition of Uber’s China arm. More notable is Lyft’s ongoing partnership with General Motors, the car giant that tried (to no avail) to purchase Lyft in 2016. GM has invested a total $500 million in the company and plans to launch thousands of electric self-driving cars with Lyft's help starting next year; that project won't interfere with Lyft's new partnership with Waymo.
Waymo, meanwhile, has its own links to the traditional auto industry, with existing partnerships with Fiat Chrysler and Honda, according to The New York Times. Founded in 2009, the company officially spun out from the Google X moonshot factory late last year and is now an independent Alphabet company based in Mountain View, CA.
Lyft's rivalry with Uber
Lyft has expanded rapidly since it was founded in San Francisco in 2012, reaching a $7.5 billion valuation with a $600 million fundraise last month that brought the company's total financing to more than $2.5 billion. The company's backers include Andreessen Horowitz, General Motors, Alibaba, and more of tech's biggest names.
While that $7.5 billion figure is still significantly smaller than Uber’s valuation of some $68 billion, it puts Lyft in the No. 2 spot in the ridesharing industry. And there are other factors pointing toward Lyft's financial health, including a burn rate that's slowing considerably, according to a report earlier this year from The Information. The company expects to be making money by 2018—potentially beating Uber in the race to profitability.
Check out more of our recent coverage of Lyft and Waymo.