When General Motors expressed interest in buying Lyft, the ridehailing service had enlisted the help of investment firm Qatalyst to find competing buyout offers or raise funding for growth.
GM, which owns a 9 percent stake in Lyft, never formally presented a takeover deal, but Lyft seemed to take little interest in a buyout by its minority shareholder.
Now, after reportedly holding acquisition talks with other companies, Lyft is struggling to find a buyer. The ridehailing company still hasn't generated enough firepower to attract any good deal. And by a good deal, we mean an acquisition offer somewhere in the range of $9 billion, sources share with Recode.
Lyft has reportedly approached Apple, Microsoft, Alphabet and even Uber, but so far the talks have failed to seal any deal.
Too Ambitious?
Is the price too ambitious for Lyft, which has struggled to beat Uber in market dominance? Only because Lyft necessarily has to rake in more funding to compete with Uber — and another round of fundraising might not be enough for Lyft to bulk up its coffers.
Lyft is worth $5.5 billion, a figure dwarfed by Uber's market capitalization of $66 billion, even as the latter is yet to float publicly. And when it does, market analysts expect the behemoth that is Uber to just keep getting bigger.
Investments In Autonomous Driving
In January, GM invested $500 million in Lyft to test the waters of self-driving cars designed for ridehailing. The GM-Lyft partnership has already benefited both companies on some fronts, such as the short-term leasing program called Express Drive, which offers cost-efficient alternatives to traditional car ownership and car leasing.
But the real action sparked by the investment is the development of software for autonomous driving cars. The race is on to build self-driving cars that commuters can easily summon with a quick tap on a mobile device. GM and Lyft thus have easy access to each other's technologies for this purpose.
In one corner, GM and Lyft are developing their system. In another, Uber and Volvo are building up theirs. A $300 million partnership between Uber and Volvo has led to the creation of 100 Volvo SUVs with self-driving features. The units are set to hit the road in Pittsburgh, an early indication of just how serious Uber is about dominating the market.
Where does this leave Lyft? An acquisition by a larger company like GM would be Lyft's best bet toward gaining a larger market share — especially since the trend in the auto industry suggests autonomous driving will create ripples across the ridehailing sector.
