For GM, the investment could provide some protection amid signs that vehicle ownership could decline with the growing use of ride-hailing services and, eventually, the arrival of self-driving cars.
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General Motors Co. announced a $500 million investment in Lyft Inc. on Monday, and an “alliance” that will bring the pair right into the autonomous-driving scrum playing out between Uber, Google, Tesla, and Apple, among others. GM will also hold a seat on Lyft’s board of directors.
Lyft was founded in 2012 and has grown quickly to establish ride-sharing networks in 190 United States cities with the vision of improving personal transport and reducing the number of cars on the road. It will team up with Lyft to create an “autonomous on-demand network”, which will also aid Lyft as it goes up against competitor Uber, which is working on its own autonomous vehicles. “We had a really common view of the future”, said GM President Dan Ammann in an interview with Reuters.
In the meantime, Lyft and GM are creating auto rental branches where people can grab vehicles for short periods of time, The Verge reports, which sounds a lot like Zip auto. In addition, they and their customers will have access to GM’s in-car OnStar concierge service.
GM said it was open to working together with certain Lyft worldwide partners that include India’s Ola, Southeast Asia’s GrabTaxi and China’s Didi Kuaidi, said Ammann. GM has invested $500 million in Lyft as part of a $1 billion funding round. GM and RelayRides cut ties a year ago when RelayRides – now Turo – rebranded itself as a long-term car-sharing company, GM spokesman Dave Roman said. “Some dinosaurs will continue to enjoy owning a vehicle but for younger people that is changing”. The company just completed a big $1 billion round of financing – but not almost as big as the billions Uber is raising at a valuation that may exceed $60 billion. By comparison, GM is valued at $53 billion and earned $153 billion in revenue in 2014, according to AP.
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Lyft’s latest funding round values the company at $4.5 billion.
