General Motors (NYSE:GM) has announced an investment of $500 million in Lyft Inc., which brings the valuation of the startup directly competing against Uber to an impressive $5.5 billion.
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On Monday, GM said it would invest $500 million in the company based in San Francisco, while both companies will work together with the goal of creating a network of autonomous, on-demand automobiles.
Although no timeline has now been set out for when the new service will become a reality, Lyft drivers will be immediately offered short-term rentals of GM cars as part of the deal. “Together we will build a better future by redefining traditional vehicle ownership”.
GM President Dan Ammann stated they see a future of personal mobility that is “connected, seamless and autonomous”. Those vehicles will tap into GM’s OnStar service, while GM and Lyft promised “personalized mobility services and experiences”, but did not elaborate.
General Motors gets a large piece of Lyft, a seat on the board, and access to the company’s software. 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.
GM’s labs have been testing the waters with autonomous concept cars, even hinting in October that the company’s strategy in 2016 would be “aggressive” and would include a fleet of self driving Chevrolet Volts.
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John Zimmer, president and co-founder of Lyft, told CNBC today that the rental cars would allow potential recruits whose own cars do not meet Lyft’s qualifications to work as Lyft drivers. While that seems to be more of a partnership about spreading Lyft’s services – which have only been available in the USA – world wide, the GM partnership seems to be a long-term technology play.
