Lyft raises $1 billion and partners with GM to develop driverless cars

Together, GM and Lyft will develop a network of on-demand autonomous vehicles. Self-driving cars aren’t far behind. That plan leverages both firms’ experience in developing autonomous technology, manufacturing, and mobile applications, according to the heads of the companies. Lyft promised “to build a network of on demand autonomous vehicles that will make getting around more affordable, accessible and enjoyable”. An automated vehicle service is still a long way off, but in the meantime the companies will work on a network of rental hubs around the country where Lyft drivers can rent vehicles on a short-term basis. In the same interview, Lyft President John Zimmer echoed that view, saying the “culture and vision are very alike” between the two companies.

GM has identified ride-sharing as the fastest-growing new transportation model, and is eager to invest in, and use, Lyft as a test-bed for its driverless vehicle projects.

For his part, GM President Dan Ammann said “We see the future of personal mobility as connected, seamless and autonomous”. GM and Lyft also aren’t disclosing where the rental option will debut for drivers, or what the pricing will look like.

GM’s announcement Monday is part of a $1 billion round of funding that, along with previous investments by others, pegs Lyft’s value at $5.5 billion.

“Why would anybody spend tens of thousands of dollars on a vehicle that sits idle for most of its life, when they could just hail a self-driving auto with the tap of an app instead?”

Lyft’s partnership with GM may be tough news for Uber.

The service will utilise GM’s work on driverless cars with Lyft’s software platform that matches drivers and passengers and calculates routes. A spokeswoman for Lyft says it’s yet to be determined whether Lyft or GM will own the self-driving cars. Kingdom Holding Company invested $100 million making the total investment of Kingdom Holding and its affiliates approximately $250 million.