Lyft was in informal talks with Alphabet along with other possible suitors in 2016 but a sale was not pursued. As the relationship has deteriorated, Waymo signed a partnership with Lyft to work together on testing autonomous vehicles. This was evident when the company offered promotional code for a Lyft ride for the upcoming Pixel 2 launch event.
If Lyft receives the investment by Alphabet, this would blow Lyft even further ahead of Uber than it already was.
In May, Lyft announced a partnership with Alphabet presumably created to find a vehicular home for the self-driving auto technology being developed by Waymo, the new name for Google's eight-year-old autonomous vehicle program. According to Bloomberg, the funding, which hasn't been finalized yet, could reach as much as $1 billion. Uber also is trying to fend off Lyft, which has gained market share this year.
The search giant invested more than $250 million in Uber through its GI venture capital arm in 2013. If news of Alphabet's investment in Lyft turns out to be true, it will be a win-win situation for both the players. The news comes amidst Waymo's legal spat with Uber, something that resulted in a deal between Waymo and Lyft earlier this year.
Lyft has as of late been concentrating on controlling spending, and thusly, an Alphabet speculation would help the San Francisco startup support development by offering endowments to drivers, rebates to riders et cetera.
Given that Uber now is not in a favorable position, as far as its ongoing legal confrontation with Waymo is concerned, these deals could help both of them (Waymo and Lyft) to gain an increasing share in the growing self driving vehicle market. It would allow the company to expand its technology and services.