GM invests $500M in Lyft, banks on autonomous on-demand rides

“We had a really common view of the future” with Lyft, said GM President Dan Ammann in an interview with Reuters.

General Motors and Lyft are hooking up by way of a $500 million investment in Lyft, the other ride-hailing service.

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.

That target is still some way off however, and neither GM nor Lyft has set a timeframe for the deliver of autonomous services. Meanwhile, the leader in the space, Uber, is looking to raise another $2.1 billion, Bloomberg News reported last month, citing people familiar with the process. While that seems to be more of a partnership about spreading Lyft’s services – which have only been available in the United States – world wide, the GM partnership seems to be a long-term technology and hardware play. In addition to the funding and a seat on Lyft’s board, General Motors GM, -2.06% will work with the San Francisco company to establish short-term vehicle rental hubs so drivers can work for Lyft without owning their own auto.

General Motors knows that, in the future, not everyone is going to own their own vehicle. 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. People have started buying less cars, after all it has always been “car ownership vs the network”.

Lyft was valued at $4.5 billion following GM’s funding, 14 times less than Uber’s $62.5 billion value, according to the NY Times.

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. Meanwhile, other Lyft investment partners also made capital contributions for this investment round, including Alibaba, Rakuten, Didi Kuaidi and Janus Capital Management.