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Carl Icahn invests $100 million in Lyft

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Lyft has gained the attention of a major new investor: Carl Icahn, who's put $100 million into the ride-hailing startup. Icahn's involvement in a company's affairs is often something that executives are wary of — he's infamous for his role as an activist investor, interested in making big changes at companies for his own profit — but that doesn't seem to be the case here. In fact, he makes the situation sound pretty straightforward to The Wall Street Journal. "If you look at the way the market evaluates Uber and then look at the valuation of Lyft, Lyft is a tremendous bargain," Icahn says. "There is room for two." Lyft is currently valued at $2.5 billion, while Uber could soon hit $50 billion.

"There is room for two."

That also explains why we're seeing Icahn invest in a startup, whereas he's usually focused on large, established companies. Icahn's investment doesn't change Lyft's valuation — it's being made as an extension of an earlier funding round — but it could help change the story when the startup next tries to raise money. Of Icahn's involvement, Lyft co-founder and president John Zimmer tells the Journal, "As we look to the future to raise capital, whether it’s next year or whenever, that’s going to be a large validation." A managing director of Icahn's company will also be added to Lyft's board of directors.

Lyft still operates in significantly fewer cities than Uber — 65 in the US versus over 250 internationally — which means it has a lot of room to grow. Lyft also offers fewer services than Uber, primarily focusing on getting car owners with some spare time to be its drivers, rather than also offering a selection of formal taxi services the way Uber does (though Lyft is starting to expand into this market). That's part of Lyft's appeal, however. You'll hear stories about Lyft drivers providing snacks, water bottles, and help to their riders, which is a pretty great way to increase ridership through word of mouth.