GM is investing $500 million in the ride-summoning startup, representing half of Lyft’s current $1 billion funding round.
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The two companies said the partnership was based on the shared view that self-driving cars will first reach consumers as part of a ride-sharing service, rather than vehicles owned by drivers.
GM will take up residency on Lyft’s board of directors and will effective immediately establish short-term rental hubs throughout the United States for Lyft drivers that do not own a vehicle.
“With GM and Lyft working together, we believe we can successfully implement this vision more rapidly”.
“We think there’s going to be more change in the world of mobility in the next five years than there has been in the last 50”, Ammann told the New York Times, adding that suburban areas are where most GM cars are sold, as opposed to the urban areas where Lyft has thrived.
Lyft president John Zimmer said: “Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives”.
The future of cars-driverless or otherwise-is increasingly looking like one in which people don’t just stop driving, they also stop owning.
The partnership is expected to help create a network of cars that would operate themselves and be available on demand. This is GM’s biggest investment in an outside company.
GM isn’t the only automaker with an eye on Lyft. For GM, the investment could provide some protection amid signs that auto ownership could decline with the growing use of ride-hailing services and, eventually, the arrival of self-driving cars. While Uber has expanded internationally, operating in 58 countries and 300 cities worldwide, Lyft’s business is restricted to only 65 U.S. cities.
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In February, Lyft’s competitor Uber – valued at more than $60 billion – announced that it was partnering with Carnegie Mellon University on a Pittsburgh research lab that could lead to the development of driverless cars. The recent venture from G.M. and other investors has increased Lyft’s valuation to $5.5 billion.
