GM Invests $500 Million In Lyft As Part Of Autonomous-Vehicle Effort
Together, the companies plan to open a network of US hubs where Lyft drivers can rent GM vehicles at discounted rates.
The investment, which is part of a financing round of $1 billion, is the largest move by any automakers thus far when it comes to coming to grips with the meteoric rise of this industry of ride-hailing.
Reflecting a clear recognition of the industry’s evolution, GM’s decision to partner with Lyft marks a shift from the one-car-per-person model.
On Lyft’s side of the deal they now get the help of an experienced and mature company like GM who has been in the auto-making business for over 100 years. The New York Times reports that GM, the automotive manufacturing giant, and ride-sharing service Lyft have come together in a deal that would give consumers more options for travel and work.
Lyft was founded in 2012 and has grown quickly to establish ride-sharing networks in 190 U.S. cities with the vision of improving personal transport and reducing the number of cars on the road.
John Zimmer, president and co-founder of Lyft, told CNBC today that the rental cars would allow potential recruits whose own cars do not meet Lyft’s qualifications to work as Lyft drivers.
GM and Lyft will create what Lyft called “an autonomous on-demand network”, and they will seek to make it “part of people’s daily lives”. The recent venture from G.M. and other investors has increased Lyft’s valuation to $5.5 billion.
The partnership will provide a big boost to Lyft, which has generally played second fiddle to fellow San Francisco-based startup Uber. In addition, Lyft has attracted .01 billion in total funding compared with Uber’s .61 billion.
General Motors President Dan Ammann (center) with Lyft Inc.co-founders John Zimmer (right) and Logan Green (left) General Motors President Dan Ammann with Lyft co-founders Logan Green and John Zimmer.
Connectivity: Lyft drivers and customers will have access to GM’s wide portfolio of cars and OnStar services, leveraging two decades of experience in connectivity. Apple and Tesla are also believed to be developing their own autonomous software and ride-sharing schemes.