As per the agreement, the companies will develop a network of on-demand autonomous vehicles that will use the self driving technology created by GM and Lyft’s broad choice of ride-sharing services.
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Although no timeline has now been set out for when the new service will become a reality, Lyft drivers will be immediately offered short-term rentals of GM cars as part of the deal.
GM President Dan Ammann said that he believes the marriage between the companies will “more rapidly” deliver a “connected, seamless and autonomous” rider experience that he envisions will define the future. A spokeswoman for Lyft says it’s yet to be determined whether Lyft or GM will own the self-driving cars. This newly announced partnership helps Lyft compete with Uber in another respect as well-in press releases, GM and Lyft added that they will develop several rental hubs around the country.
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The deal could be a potential win-win for Lyft, both now and in the future. Most of the world’s top auto companies are working to introduce self-driving cars. In return, GM will hold a seat on Lyft’s board of directors. Also for GM, the partnership could give the company an advantage over rivals like Ford Motor Co. The association also means GM might have an inside track at selling GM vehicles to Lyft drivers. In addition, they and their customers will have access to GM’s in-car OnStar concierge service. The companies provided no timeline for their ride sharing service. Lyft is the fastest growing rideshare company in the U.S and is available in more than 190 cities. Meanwhile, other Lyft investment partners also made capital contributions for this investment round, including Alibaba, Rakuten, Didi Kuaidi and Janus Capital Management. In October, Lyft reached an annual gross run rate of $1 billion and surpassed more than 40 percent market share in San Francisco and Austin. Though recently the company announced that the post valuation of the company now is $5.5 billion.
