GM, Lyft To Develop Self-Driving Cars With $500M Partnership

“We see the future of personal mobility as connected, seamless and autonomous”, said GM president Dan Ammann. A fleet of self driven cars that can work on the Lyft platform, as GM thinks of it to be the future of Taxi aggregation services.

Lyft, Uber’s smaller rival just got a helping hand that could make its competition with the San Francisco, California company easier. The companies will also work together on a series of national rental hubs in the U.S. where Lyft drivers can rent short-term vehicles to earn money as Lyft drivers.

Ride sharing firm Lyft announced that General Motors Company (NYSE:GM) will invest $500 million in company’s ride-sharing services.

Although the concept of shared rides could be injurious to auto manufacturers, GM says it welcomes an opportunity to be a part of the changing business model.

Lyft’s valuation is now up to $5.5 billion.

Self-driving tech is set to figure heavily in ride-sharing services.

The announcement has come at a time when automakers are trying to figure out ways to address the competition they would face from Apple, Alphabet and Uber in self driving vehicle technology.

A recent report on the vehicle industry by McKinsey suggests incumbent automakers are likely to evolve to become software and mobility providers as they chase additional revenue streams based on services and customer data in the years ahead. Last month, Saudi Arabia billionaire Prince al-Waleed bin Talal invested more than $100 million in the company.

GM will gain one seat on the board of directors at Lyft in exchange for the investment.

According to John Zimmer, president and co-founder of Lyft, together with GM, the ridesharing company will expand its knowledge in transportation and will build a better future.

A late-2014 funding round of $1.2 billion valued Uber company at more than $40 billion.