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GM to invest $500 million in Lyft
Posted On Jan 06 2016
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On Monday, Jan. 4, 2016, General Motors Co. announced it is investing $500 million in ride-sharing company Lyft Inc. The ride sharing company has announced that it managed to secure as much as $1 billion in capital, made possible by a recent $500 million investment by General Motors (GM).
“Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives”, he says.
Discussing the deal, GM president Dam Ammann said “We see the future of personal mobility as connected, seamless and autonomous”.
Together, GM and Lyft plan to open a network of USA hubs where Lyft drivers can rent GM vehicles. While Uber has expanded internationally, operating in 58 countries and 300 cities worldwide, Lyft’s business is restricted to only 65 U.S. cities. With the latest investments, Lyft is now valued at $5.5 billion.
“I think from GM’s standpoint it’s better doing this then building a Lyft competitor”, said Stover, adding that many auto manufacturers are seeking to partner with Silicon Valley companies. As a result, GM gets a seat on Lyft’s board and access to the three-year-old company’s software, which matches riders with drivers and automates payments. In December, California’s Department of Motor Vehicles issued the first-ever regulations for self-driving cars requiring a driver to be behind the wheel of an autonomous vehicle at all times. For comparison, Lyft operates in just 190 USA cities, and just recently formed partnerships in China and India.
The announcement comes at the beginning of the Consumer Electronics Show (CES), which promises more news on SDV with a number of panels and other announcements from the likes of Volkswagen, Valeo, and a rumored partnership between Google and Ford for autonomous vehicles. Lyft said it has raised a total of $2 billion since August 2013. It worked with Carnegie Mellon’s robotics department to develop self-driving cars, and then “poached” about 50 of the university’s staff to work internally, Bloomberg reports.
