No rest for Uber investors: Waymo and Lyft sign self-driving car deal

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Uber Technologies Inc. investors will not be sleeping well anytime soon, as news broke over the weekend that Waymo Inc., Google Inc. parent Alphabet Inc.’s self-driving car unit, has signed an agreement with Uber archrival Lyft Inc.

The deal will see Waymo vehicles hitting the road in the near future in the service of Lyft. The pact, revealed by “sources familiar with the agreement” who spoke to The New York Times and since confirmed by both companies, includes Waymo and Lyft working together to “bring autonomous vehicle technology into the mainstream through pilot projects and product development efforts.”

“Waymo holds today’s best self-driving technology, and collaborating with them will accelerate our shared vision of improving lives with the world’s best transportation,” a Lyft spokeswoman told the Times. A Waymo spokesman added, “Lyft’s vision and commitment to improving the way cities move will help Waymo’s self-driving technology reach more people, in more places.”

Both companies are already well along the path to deploying self-driving vehicles in regular revenue service. Waymo started testing its own taxilike service in Phoenix, Arizona, in April with an initial fleet of self-driving hybrid Chrysler Pacifica vans. Lyft previously announced a deal with General Motors Corp. that would see a fleet of self-driving Chevrolet Bolt electric vehicles deployed onto streets beginning in 2018.

The deal comes at a time when Waymo and Uber are currently in serious dispute, with the former accusing Uber of having stolen its self-driving technology. Along with suing Uber for intellectual property theft, Waymo has also lodged an application that would prevent Uber from continuing to work on its self-driving vehicle project. Uber faces a seriously tough battle, particularly given that Waymo provided what it said is ample evidence that the ride-hailing giant has intentionally attempted to hide its theft of Waymo’s technology.

Uber remains the largest ride-hailing company by multiples over Lyft, but the larger company’s ultimate business model appears reliant on the use of self-driving vehicles to stem its ongoing operating losses by negating the need for drivers. If Lyft beats Uber to market with a fleet of self-driving vehicles in regular revenue-producing service, that would deal a serious blow to Uber, at least in the United States.

Photo: skellysf/Flickr