Apple Inc. (NASDAQ:AAPL) and Lyft have not talked about it publicly, but it has emerged that an alliance between the two companies is in the works. Apple is reportedly interested in taking a significant equity stake in Lyft. However, details such as what size the stake will be and how much Apple is willing to invest in Lyft remain a secret.

That fact that Apple is showing interest in owning a significant stake in Lyft only a few months after making a $1 billion investment in China’s Uber rival, Didi Chuxing should raise some questions about Apple’s automotive ambitions. Worthy of note, Lyft is the second leading taxi services provider in the U.S. after Uber.

Investment talks follow failed buyout

Although Apple and Lyft are working toward an investment deal, it is important to consider that this was not what Lyft was originally seeking. There were reports that Lyft was interested in selling itself outright to the highest bidder. Lyft was seeking a buyout valuation of $9 billion, subsequently approaching a number of potential buyers including Apple, Amazon, Microsoft and Google owner Alphabet.

However, Lyft failed to get a suitable offer, perhaps considering that the $9 billion the company was seeking was way above its most recent valuation of $5.5 billion. Though Apple couldn’t commit to an outright buyout of Lyft, Apple still sees value in being an investor in the ride-sharing company.

Why Apple wants a slice of Lyft

There have been many reports that Apple has neither confirmed nor denied, indicating that Apple is working on an electric and autonomous car to be called the “Apple Car.” On top of the secretive Apple Car program, which is said to be hidden under a project called Project Titan, Apple has a vehicle operating system called CarPlay that is targeting the automaker market. Additionally, Apple has continued to invest in its mapping technology.

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With that in mind, even a partial hold on Lyft could give a boost to Apple’s various vehicle-oriented technologies and possibly offer the tech giant a head start against its competition.

It has been cited that one area that is likely to see quick and widespread adoption of fully autonomous vehicles is the taxi market. That would explain why Uber has repeatedly talked about launching fully automated rides. It is the same the reason Alphabet is eyeing the ride-sharing market with its self-driving cars that have long been under development.

If Apple intends to compete with Alphabet, Uber, Ford and others in in fully autonomous taxi services market, a strategic partnership with Lyft makes sense for the company’s ambitions.

With growing competition in and saturation of the smartphone market, Apple is under pressure to break its overreliance on iPhone revenue- a key reason the company is now targeting the automotive market. As such, Lyft could provide a much-needed channel to sell the anticipated electric and self-driving Apple Car.

As for Lyft, a partnership with Apple could be just what Lyft needs to either catch up to speed with rival Uber or speed past it. The investment and technology that Apple brings to Lyft’s table are much-needed support for the ride-sharing company to strengthen its global ambitions.