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Lyft and Waymo will work together on self-driving cars
AP Photo/Paul Sancya

Lyft and Waymo, Alphabet's self-driving car unit, have inked a deal to work on self-driving cars, the companies confirmed to the New York Times. The talks began last summer, according to the report.

Why it makes sense: The companies have a complimentary approach, since Lyft doesn't plan to build its own cars and Waymo has been developing self-driving car technology since 2009 (though it recently decided not to manufacture vehicles on its own). Waymo recently rolled out a pilot testing program in Phoenix through which passengers can summon a self-driving mini-van (with a safety driver in a front) through an app and take a ride wherever they need to go. Lyft's ride-hailing network could help Waymo expand its testing. The deal could also help Lyft catch up faster to rival Uber, despite being a distant No. 2 to it in the ride-hailing market.