GM invests $500m in Lyft with eye on self-driving auto networks

General Motors announced today that it is investing $500 million in ride-sharing service Lyft, with plans to create a network of on-demand autonomous vehicles in the United States. And with the latest influx of capital, Lyft is now valued to as much as $5.5 billion. This significant investment earns GM a seat on Lyft’s board of directors, and marks the start of a long-term alliance with a very futuristic goal. More immediately, the two companies hope to create auto rental hubs, providing some Lyft contract drivers with their vehicles.

“We think there’s going to be more change in the world of mobility in the next five years than there has been in the last 50”.

Recently, Toyota and Ford said that they would adopt the same software to link smartphone apps to vehicle dashboard screens, and Ford also teamed up with Google to manufacture self driving cars.

“We believe that the first large-scale deployment of autonomous vehicles will be in this kind of on-demand, ride-share platform”, GM President Dan Ammann said in an interview with the WSJ.

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. Those vehicles will tap into GM’s OnStar service, while GM and Lyft promised “personalized mobility services and experiences”, but did not elaborate. Lyft said the new investments bring the company’s valuation to $5.5 billion. Together, they’ll work on extending GM’s autonomous driving project, already in development.

Other investors in the funding round included Asian e-commerce companies Rakuten and Alibaba, as well as Chinese taxi service Didi Kuaidi.

Phil Harrold, automotive partner at PwC, said: “Across the patch we are seeing a realisation that the market is changing”.

Lyft, Uber’s smaller rival just got a helping hand that could make its competition with the San Francisco, California company easier.