GM To Invest $500 Million In Lyft, Build Autonomous On-Demand Car Network

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Ride-sharing! Mobility! Autonomous vehicles! Welcome to the world of cars in 2016. Here’s a huge development on all of those fronts: General Motors announced today it will invest $500 million in ride-sharing service Lyft and partner with the San Francisco startup for a network of autonomous on-demand cars.

This is a huge deal for both companies. It gives GM a seat on Lyft’s board, provides Lyft with half its latest $1 billion venture capital financing round, and sets both companies up to create a network of on-demand autonomous vehicles.

From a GM statement, here are the goals of the alliance:

· Autonomous On-Demand Network: The joint development of a network of on-demand autonomous vehicles will leverage GM’s deep knowledge of autonomous technology and Lyft’s capabilities in providing a broad choice of ride-sharing services.

· Rental Hub: Beginning immediately, GM will become a preferred provider of short-term use vehicles to Lyft drivers through rental hubs in various cities in the U.S.

· Connectivity: Lyft drivers and customers will have access to GM’s wide portfolio of cars and OnStar services, leveraging two decades of experience in connectivity. This will create a richer ride-sharing experience for both driver and passenger.

· Joint Mobility Offerings: GM and Lyft will also provide each other’s customers with personalized mobility services and experiences through their respective channels.


The news comes as Ford garners big headlines for its new autonomous car partnership with Google, details of which should be revealed at this week’s CES show in Las Vegas. It’s a very progressive move from GM, and a huge boost for Lyft, which is still massively dwarfed by arch-rival Uber in terms of funding and market share.

The New York Times reports GM and Lyft have not given a timetable on the partnership yet. John Zimmer, Lyft’s president, told the publication he thinks the “autonomous vehicle go-to-market strategy is through a network, not through individual car ownership.”


One might see that as a threat to traditional automakers’ entire business strategy, and it might be, unless they start to get in on the game themselves as Ford and now GM seem to be doing. Via the Times, here’s GM President Dan Ammann:

“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,” he said.

Mr. Ammann noted that the core profit from G.M.’s business comes from cars sold outside the urban environments where Lyft primarily operates, especially sales of sport utility vehicles in suburban areas.

“From a G.M. perspective, we view this as much more of an opportunity than a threat,” he said.


This should be an interesting one to watch.

Photo credit Chevrolet

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