Lyft and Waymo’s Partnership

Today’s review will be a bit short (only one article-worth) as I didn’t have too much time to read and digest many articles today.

It is confirmed by both sides that the ride-hailing startup Lyft and Google’s self-driving car unit Waymo are partnering. Although nothing has been announced about what exact form the partnership will take and what kind of product the companies will be working toward, this is a very reasonable deal for both sides of the table as many factors would have driven them to make the collaboration move.

  1. The Common Enemy (Uber)

Waymo has been battling Uber on a trade secret dispute that is now going to the court. This legal dispute is just one aspect of the battles these two companies (and many more) are having in the self-driving car market, which is presumed to be the next golden goose (one of may geese, in fact). Lyft, in the meantime, is still far behind Uber in market share despite all the public condemnation its rival is going through recently. It completely makes sense for both of these companies to partner up and battle against their mutual enemy.

2. The Perfect Fit

Lyft, in the past, has consistently said that is has no intention to build its own self-driving technology. In some sense, this direction makes sense because Lyft is still in the “catching-up” phase as a second-runner in the ride-sharing market, and the autonomous driving technology is still premature and will require a lot of long-term investment which might be burdensome for the company at the current stage. However, they also realize that in order to meet the needs of their riders at scale, they will eventually have to move into the autonomous vehicle market. Since it currently does not have the capacity to develop its own technology, why not partner with someone who does?

All the while for Waymo, ride-sharing services like Lyft is a perfect platform for it to test its technology, given that it is now beyond the research-stage. Many people are assuming that Waymo’s decided that its self-driving technology is ready to be tested by many of the recent moves and partnerships it is announcing. While Waymo is also partnering with automakers to test, many, including myself, are predicting that rather than OEMs manufacturing self-driving cars for individual customers, the future might be in large-scale ride-sharing businesses operating completely through autonomous vehicles, which is the exact vision Travis Kalanik of Uber (among many others) has. For that reason, it is definitely a good option for Waymo to hold Lyft’s hands (well it really couldn’t do that with Uber, after all).

In conclusion, two companies are partnering with each other to fulfill their own needs at the moment, while battling Uber in hopes that they will be able to surpass the trembling enemy. Meanwhile, as an observer, I will keep a closer eye one exactly what this partnership will fruit, for better or worse.

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