by Donald Wood
Last updated: 12:00 PM ET, Mon March 16, 2015
The ridesharing app craze has swept the world recently, and startup company Lyft is looking to become a major player in the industry by teaming up with Japanese e-commerce giant Rakuten.
According to Douglas MacMillan of the Wall Street Journal, Rakuten led a group of investors that also included Fortress Investment Group and helped garner $530 million in new capital for Lyft's battle against ridesharing industry leader, Uber.
The recent deal brings the value of Lyft to more than $2.5 billion.
Lyft is facing a major test against Uber, a company that has $5 billion in funding and availability in 292 cities, according to MacMillan. On the other hand, Lyft currently is only available in 65 cities across the United States.
When asked about the purpose of the new investments, Lyft's co-founder and president John Zimmer told the Wall Street Journal that it will be for, "primarily aimed at taking market share away from Uber in the U.S., where a growing number of people rely on the apps for their regular commutes."
One of the ways Lyft is trying to make its mark on the industry is with superior service to Uber. As one of the investors in the ridesharing app, Andreessen Horowitz general partner Scott Weiss told MacMillan that Lyft would emphasize, "better customer service from drivers and building more loyalty with passengers."
The report also claims that the company will be looking to expand internationally by the end of 2015. The backing of the Japanese company Rakuten could be an indicator that the growth could see the app become available in Asia.
According to MacMillan, Lyft and Uber have been involved in a serious economic battle that includes undercutting each other on prices, stealing drivers and swearing investors to secrecy regarding new projects.
The efficiency of the ridesharing apps is undeniable, and the service looks to be here to stay. In any open market, competition will help keep costs down and should result in better quality.
That's good news for consumers.
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