In an effort to create an integrated network of on-demand autonomous vehicles in the U.S., General Motors has entered a long-term strategic alliance with Lyft. Per the agreement, GM will invest $500 million in Lyft, which the company will use to grow its ride-sharing business. Rather than stay neutral in the battle between Uber and Lyft, GM invested because of the “level of integration and cooperation that will be required, particularly for the longer term nature of this”, he said in a phone interview. Detroit-based GM also has an enviable global reach; it sells nearly 10 million cars each year in more than 100 countries.
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By allowing drivers and customers access to GM’s wide variety of cars and OnStar services, this partnership will help create a richer ride-sharing experience both for drivers and passengers.
John Zimmer, president and co-founder of Lyft, added: “Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives”. It also becomes a preferred vehicle provider, with the chance to get many more people behind the wheel of a Chevrolet, Buick, GMC or Cadillac. “Together we will build a better future by redefining traditional vehicle ownership”. While GM will initially work with Lyft to establish short-term auto rental hubs, the partnership plans to eventually see self-driving GM vehicles in Lyft’s inventory of available cars.
In late December, CNNMoney reported that Lyft was seeking up to $1 billion in new funding. Ammann said. “We see a really compelling, complimentary set of capabilities”. The company just completed a big $1 billion round of financing. By comparison, GM is valued at $53 billion and earned $153 billion in revenue in 2014.
If you remember GM’s joint venture with the car-sharing service RelayRides, you might think that GM simply wants to diversify its investment portfolio by buying up a piece of the world’s #2 ride-sharing company.
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GM’s stock was down about 3 percent around 12:20 p.m. Monday.
