Ride-hailing application startup Lyft Inc. has received a $500 million investment from General Motors to build a fleet of driverless cars.
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The companies envision an integrated “autonomous on-demand network”, with GM working on the development of self-driving cars and Lyft developing software to bring the cars to customers’ doors.
Lyft and GM will also work together on a series of national rental hubs where Lyft drivers can rent short-term vehicles, unlocking new ways for people to earn money without having to own a auto.
“We see the future of personal mobility as connected, seamless and autonomous”, Ammann was quoted saying in a statement.
Under the terms of the investment – which values three-year old Lyft at about $5.5bn – GM has become the preferred provider of vehicles for Lyft drivers in the US. F and Daimler AG DDAIF, who are both now working to develop ride-sharing services of their own.
The massive investment by GM accounts for half of Lyft’s latest $1bn (£680m) fundraising round and is one of GM’s biggest investments in another company to date. While Uber has expanded internationally, operating in 58 countries and 300 cities worldwide, Lyft’s business is restricted to only 65 USA cities. As part of the deal, GM will also get a seat on Lyft’s board of directors.
Under the agreement, General Motors (GM) is planning to invest $500m in Lyft to help the company continue its growth in ridesharing service.
Lyft, a US-based rival to Uber, plans to offer autonomous vehicle services in place of human drivers.
Lyft was valued at $4.5 billion following GM’s funding, 14 times less than Uber’s $62.5 billion value, according to the NY Times. For comparison, Lyft operates in just 190 USA cities, and just recently formed partnerships in China and India.
But Uber’s CEO has said it could take up to 15 years before self-driving cars are effectively deployed in the US.
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A number of technology companies, most prominently Google, are looking at developing driverless cars.
