Lyft Receives $500 Million from GM, Now Valued at $4.5 Billion

Lyft’s current service of on-demand ride sharing created over 7 million rides a month during 2015 in more than 190 cities within the US, with the company grossing over $1 billion in revenue through October. 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. Daniel Ammann, president of G.M., said that the company makes their core profit selling vehicles outside of the urban areas where Lyft primarily operates.

The ride-sharing company Lyft announced Monday it raised $1 billion, half from General Motors, which will be a business partner for its planned use of driverless cars.

GM will hold a seat on Lyft’s board of directors as part of the deal. “If, you know, you’re heading with your family to Tahoe, you’ll get to order a specific kind of autonomous experience where you get to enjoy movies on your trip or after work you can get a sports Lyft and watch a Clippers game with friends”.

The move by GM highlights the industry’s desire to become more involved in these new technologies/services before it’s too late.

Together, the companies plan to open a network of US hubs where Lyft drivers can rent GM vehicles.

In a keynote speech to be delivered in Las Vegas on Wednesday GM CEO Mary Barra is expected to disclose more details about GM’s progress in developing autonomous technologies. Both foresee major change in the traditional model of auto ownership, and they shared similar ideas about how to address it.

“It felt very natural very quickly”, Zimmer said.

Ammann said the investment was an alliance. “We had a really common view of the future”, said GM President Dan Ammann in an interview with Reuters. Existing Lyft investors that have invested more this investment round include Janus Capital Management, Rakuten, Didi Kuaidi and Alibaba. For comparison, Uber is valued at $65 billion.

But neither company can afford to rest.

However, only years will tell if the GM and Lyft partnership will turn fruitful when they think of “shaping the future of mobility”.