Lyft Flags Down $1B Investment Round Led by General Motors

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.

The massive investment by GM accounts for half of Lyft’s latest $1bn (£680m) fundraising round and is one of GM’s biggest investments in another company to date. Lyft drivers will have access to GM cars and OnStar services, making the ride-sharing options on offer more attractive.

“The auto industry is going to change more in the next five years than in the past 50”, said Dan Ammann, president of GM. A fleet of self driven cars that can work on the Lyft platform, as GM thinks of it to be the future of Taxi aggregation services.

Saudi Prince Alwaleed Bin Talal’s Kingdom Holding Co., whose investments include stakes in luxury hotel companies Four Seasons and Fairmont Raffles, invested $100 million in Lyft as part of the most recent funding round. GM is at the forefront of autonomous vehicle development and Lyft is the leading innovator of software to automate ride matching, routing and payments.

Logan Green, co-founder and chief executive officer of Lyft, displays his company’s “glowstache” during a launch event in San Francisco. Uber is already working with researchers at Carnegie Mellon on driverless cars, while Google and Ford are expected to announce a new company focused on autonomous vehicles.

This is just part of Lyft’s news this morning, the rest including a total of $1 billion raised from a variety of partners.

In the immediate future, GM will be a preferred provider of short-term-use cars for Lyft drivers.

Like Lyft, Uber is also working to expand beyond its current reliance on user-owned cars to autonomous vehicle services. By comparison, GM is valued at $53 billion and earned $153 billion in revenue in 2014. The plan to move into self-driving cars however, has been in the works at GM for some time.