General Motors Bets Big On Autonomous Ride Sharing Future With Lyft

General Motors and ride-sharing service Lyft announced a partnership Monday to create a fleet of self-driving cars.

For now, the deal means GM cars will be the “preferred” vehicle used by Lyft drivers who rent their cars in various US cities.

“Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives”, said John Zimmer, president and co-founder of Lyft.

“We see the future of personal mobility as connected, seamless and autonomous”, said Dan Ammann, president of GM, in a press release.

Lyft said it was the fastest-growing rideshare platform in the U.S., boasting 7 million rides per month in more than 190 cities. In September Lyft and Didi, a huge ride hailing service in China, announced they’d be teaming up.

After its latest round of fund raising, Lyft is now valued at around $5.5 billion, and the company is projected to have approximately $1 billion in revenue this year.

GM will hold a seat on Lyft’s board of directors as part of the deal. A spokeswoman for Lyft says it’s yet to be determined whether Lyft or GM will own the self-driving cars.

In addition, as part of their new partnership, Lyft and GM will be creating an Autonomous On-Demand Network together.

Lyft may represent but a fraction of the ride-hailing economy dominated by Uber, and so far it hasn’t expressed an interest in autonomous vehicles.

Lyft already has thousands of people interested in participating in its network as drivers, but they do not meet the requirements due to not having a auto or having a vehicle that does not meet the specifications set by the company. The first is the “joint development of a network of on-demand autonomous vehicles”.

This latest round values Lyft at $5.5bn, roughly a tenth of GM’s market capitalisation.

GM, rather that remain neutral in the battle between Lyft and Uber, invested because of the level of cooperation and integration that would be required in particular with the longer term nature of the plan.