Lyft has been growing its cash cushion to take on Uber.
Initially, Alphabet teamed up with Uber. The company was reported to be raising a new $1 billion round, with Alphabet involved, back in September.
Lyft raised $600 million at a $7.5 billion valuation in April this year, with investment from new partners including Canada's public employee pension fund.
Lyft announced today that Alphabet's investment arm CapitalG-formerly known as Google Capital-lead a $1 billion investment round in the ride-sharing company. David Lawee, a partner at CapitalG, will join Lyft's board. The two companies are collaborating on bringing autonomous vehicle technology to market, but have not provided many details. Uber began heavily recruiting Google employees for a number of divisions within the company and Google chief legal officer David Drummond stepped down from Uber's board previous year as the two companies began racing to develop autonomous auto technology.
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Google's self-driving auto spin-off Waymo is suing Uber in federal court, alleging that its former ally recruited some of its top engineers as part of an elaborate scheme to steal its trade secrets. Those tensions prompted one of Google's top executives, David Drummond, to resign from Uber's board a year ago.
"It is another punch by Alphabet at Uber", said Erik Gordon, an entrepreneurship expert at the University of Michigan's Ross School of Business. Uber's valuation tops $68 billion, despite recent setbacks.
Bill Maris, founder of GV who has since left to run his own venture capital firm, told Reuters last week there is a strong case for GV to sell.
"This thing likely goes up from here", Maris said.
Alphabet, Google's parent company, has forged a close relationship with Lyft.