Lyft’s shiny new $5.5 billion valuation comes with further investments from the likes of Janus Capital Management, Japanese e-commerce company Rakuten Inc., and Saudi Arabia’s Kingdom Holding Co. Lyft drivers and customers will also gain access to GM’s portfolio of OnStar services, and GM will hold a seat on Lyft’s board of directors.
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General Motors Company [NYSE:GM] today announced it is entering a long-term strategic alliance with Uber-rival Lyft to create an on-demand ride-sharing service that will rely on a fleet of autonomous cars.
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.
“GM is the largest automaker in the USA, so it made a lot of sense”, said Lyft president and cofounder John Zimmer.
GM and Lyft announced the joint venture on Monday, with the two companies agreeing to work together on driverless cars themselves, and driverless cars that will operate as for-hire vehicles, . The companies provided no timeline for their ride sharing service. The companies also plan to team up to develop a national network of rental hubs for Lyft drivers to rent GM vehicles that they can then use to ferry passengers. How exactly this network of autonomous vehicles will work and when it will arrive are still unknown. It has agreed to fund a partnership with Lyft, the ride sharing service, to the tune of $500,000,000. “We are thrilled to take this momentum into the new year and continue improving life in our cities through more affordable, accessible and enjoyable transportation”.
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Kalanick at Uber, whose company has invested aggressively in cars that are self-driving, said that it could be between 5 and 15 years prior to such vehicles being deployed meaningfully around the nation. That’s from Lyft’s own press release, mind you. Uber is reportedly in the midst of a $2.1 billion funding round that would value it as high as $64.6 billion.
