The ridehailing firm confirmed the deal but has not disclosed other details, Axios reported on Friday.
Halo Cars places LED screen on top of rideshare vehicles to deliver "hyper-targeted" advertising based on time, location, weather and other factors.
Lyft's main rival, Uber (UBER) - Get Free Report has also been testing car-top advertising through a partnership with a startup called Cargo. Uber earns a cut of the advertising revenue, Axios reported.
Both Uber and Lyft are under pressure to deliver a profit over the next several quarters, and the advertising deals could represent a new stream of revenue for the companies.
Shares of Lyft were down 1.76% to $44.68 on Friday, while Uber shares were down 0.77% to $40.60.
Lyft is expected to report a loss of $147.7 million, or 48 cents a share, on sales of $1.1 billion for the current quarter, based on a FactSet survey of 23 analysts. In the same period a year ago the company posted a loss of $9.02 a share on sales of $776 million. It reported a loss of 248.9 million. The stock has fallen 15.7% since the company last reported earnings on Feb. 11.
Uber is expected to report a loss of $988.8 million, or 65 cents a share, on sales of $4 billion for the current quarter, based on a FactSet survey of 27 analysts. In the same period a year ago the company posted a loss of $2.26 a share on sales of $3.1 billion. It reported a loss of 887 million. The stock has risen 10.3% since the company last reported earnings on Feb. 6.