General Motors and Lyft Are Building A Fleet of Self-Driving Cars

The development of a network of on-demand autonomous vehicles will combine GM’s advancing autonomous technology and Lyft’s platform of ride-sharing services.

As the Internet of Things continues to develop as a concept, the race to capture the self-driving vehicle market of the future is heating up. Today Lyft announced that it is closing on an impressive $1 billion in its latest round of fundraising, with a full half coming from General Motors.

A recent report on the vehicle industry by McKinsey suggests incumbent automakers are likely to evolve to become software and mobility providers as they chase additional revenue streams based on services and customer data in the years ahead. For GM, the investment could provide some protection amid signs that auto ownership could decline with the growing use of ride-hailing services and, eventually, the arrival of self-driving cars. GM will use its knowledge of autonomous vehicle technology while Lyft will contribute its ride-sharing expertise.

Lyft Co-Founder and President John Zimmer and GM President Dan Ammann said in interviews with the Associated Press that the two companies started serious talks about three months ago.

From left to right: Logan Green, chief executive of Lyft; Daniel Ammann, president of General Motors; and John Zimmer, president of Lyft.

Ammann said the alliance should not be viewed as odd given Lyft is in the business of ride sharing, which theoretically hurts automobile sales for the likes of GM.

However, it still lags behind Uber, which is valued at more than $50 billion. General Motors can tap into these people through Lyft to sell them vehicles at affordable prices through larger volume.

Lyft, Uber’s smaller rival just got a helping hand that could make its competition with the San Francisco, California company easier. Uber has also taken steps toward developing self-driving cars, including forming a partnership with Carnegie Mellon University.