Investors fuel a multibillion-dollar ride-sharing frenzy

SAN FRANCISCO: Investors including Japan’s SoftBank and Google-parent Alphabet are fueling a drive to a ride-sharing future, betting on startups such as industry giants Uber and Lyft which have so far failed to deliver profits. The frenzied pace of investment suggests optimism over a new model that has disrupted local taxi and transport operations around the globe.

A recent Goldman Sachs study projected that the worldwide ride-sharing market could grow eight-fold by the year 2030, reaching $285 billion annually.

Lyft, which is Uber’s main rival in the United States, raised a billion dollars in a recent investment round led by an investment arm of Alphabet. That means the Google parent now has investments in both Uber and Lyft. Meanwhile Uber’s board of directors has approved a plan that opens the door to a colossal investment by Japanese telecommunications giant SoftBank.

Another major player in the sector, Didi Chuxing in China, bought Uber’s operations in that country last year and has invested in Lyft and India’s Ola as well.

Didi has become Asia’s most valuable startup, worth some $50 billion based on a recent funding round. Uber’s new chief executive has vowed to take the company, valued privately at nearly $70 billion, public with a stock market debut by the year 2019. Lyft, with a valuation near $11 billion, is reported to be mulling a strategy to also go public.