Blow to Uber: Lyft teams up with Google

Google has teamed up with Lyft to develop self-driving vehicles. Photo / AP

Google's driverless cars division has teamed up with US ride-hailing business Lyft to develop autonomous technology for vehicles.

The two California firms have agreed to work together on pilot projects with the aim of making mainstream self-driving technology.

The move will escalate tensions between Google and Uber, who have been fighting a bitter lawsuit over the systems behind their autonomous cars.

Google's Waymo, which has been trialling driverless minivans in Phoenix, said the deal will help it expand its tests.

"Lyft's vision and commitment to improving the way cities move will help Waymo's self-driving technology reach more people in more places," said Waymo.

Working with Lyft will give the technology giant access to swathes of data, while the ride-hailing app will be eager to join the autonomous vehicle battle with a powerful ally.

"Waymo holds today's best self-driving technology, and collaborating with them will accelerate our shared vision of improving lives with the world's best transportation," said Lyft.

The tie-up comes as a blow to Uber, which has hit multiple roadblocks in its autonomous vehicle ambitions. Uber is fighting a lawsuit against Google over its driverless technology. Google is suing Uber for allegedly stealing the technology behind its self-driving vehicles.

Since the proceedings began, the head of Uber's self-driving division and former Google employee Anthony Levandowski has stepped aside. Sherif Markaby also resigned as the company's vice president of global vehicle programs.

The embattled ride-hailing app is separately facing a criminal investigation by the US Government over the secret "Greyball" technology that it is accused of using to evade regulators.