General Motors invests $500M in Lyft to create network of driverless cars

General Motors (GM), the century-old vehicle company behind major automotive brands Chevrolet, Buick, Cadillac, and Vauxhall, announced today that it’s investing $500 million in ride-sharing company Lyft.

Neither Lyft nor GM revealed timing for an autonomous network, but did say the two companies will leverage GM’s deep knowledge of autonomous technology and Lyft’s capabilities in providing a broad choice of ride-sharing services.

John Zimmer, Lyft’s president and co-founder, said: “This raise and collaboration with GM are exciting milestones in our three-year history that continue Lyft’s leadership in redefining traditional vehicle ownership”. In addition, GM will become the preferred provider of short-term vehicles for Lyft drivers.

Although most of the specifics of this network of driverless rideshare have not yet been cemented, GM said this system would leverage the deep knowledge the automaker has of autonomous technology, with the broad choice of Lyft’s ride-sharing service.

The driverless or autonomously driven cars have been the focus point for many companies starting from Tesla, Uber to Ford with Google being the forbearer of the idea. This could be very beneficial for both companies, as it could expand Lyft’s business by providing people who don’t own cars an opportunity to work with Lyft.

From General Motors’ perspective, part of that future involves self-driving cars.

Through the partnership, Lyft drivers and customers will have access to GM’s OnStar services.

That target is still some way off however, and neither GM nor Lyft has set a timeframe for the deliver of autonomous services.

GM’s half-billion-dollar investment earns it a seat on Lyft’s board of directors. Other investors include Saudi Arabia’s Kingdom Holding Co., Janus Capital Management, Rakuten, Didi Kuaidi, and Alibaba.

Post-investment, Lyft will now be valued at $5.5 billion; an impressive figure for a company that was founded only four years ago, but it still pales in comparison to Uber’s $60 billion-plus valuation.

The move is an infusion for Lyft as it competes with larger rival Uber.