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Why Lyft and Waymo got together. (It’s not because of Uber.)

Lyft and Google subsidiary Waymo have reached an agreement to collaborate on self-driving cars.

Both companies have a shared hatred of Uber. Lyft is locked in a bitter market share war with Uber while Waymo is currently suing Uber for stealing its technology. Uber is also the subject of a criminal investigation because of the alleged theft. However, Lyft and Waymo’s alliance is based on need, not hatred of a competitor.

What Lyft gets from the deal.

Lyft gets a big partner in the deal, as well as an entry into the autonomous vehicle market. While it’s true Lyft already had a similar deal in place with GM, Waymo’s autonomous driving technology is ahead of GM’s. Waymo’s technology has logged over 3 million miles and is beginning free consumer testing in Phoenix. Lyft will also get to compare GM’s self driving tech with Waymo’s.

What Waymo gets from the deal.

Waymo gets passenger data, which it sorely needs if it’s going to commercialize self-driving technology. Waymo needs information on how passengers get around in Lyft vehicles. Do drivers tend to avoid freeways on certain routes? How many vehicles are needed when a concert lets out? Which streets provide the most efficient route at different times during the day? These are questions that Waymo needs Lyft to help answer.

While Waymo’s (and Ford’s) self-driving tech are ahead of their competitors, they both lack real-world passenger data. In other words, they really have very little knowledge of how people would use self-driving vehicles to get around. By partnering with Lyft, Waymo gets a leg up on Ford.

What comes next? (utter speculation)

If you’re Ford, you might consider looking at doing a similar deal with Uber. Uber’s self-driving tech is significantly behind Ford’s while Ford, like Google, lacks real world passenger data.

The deal will also lend credence to possible acquisition rumors. Many analysts are starting to think that Uber and Lyft might end up being acquired in the next few years. Uber’s valuation (50-60 billion) is currently too high for an acquisition, but Lyft could be bought for around $10 billion.

So, will Google eventually buy Lyft?

Source: The New York Times