GM Invests Half a Billion in Lyft for Autonomous Car Network
Jennifer van der Kleut
Tesla, Uber, Google and (maybe) Apple have some competition hovering.
News outlets pounced on the story Monday, Jan. 4 — the first official business day of 2016 — when the announcement was made that General Motors was investing $500 million in ride-hailing app Lyft, with a view toward forming a future autonomous car network.
Lyft is Uber’s lesser-known twin, and after its latest round of $1 billion in new funding, San Francisco-based Lyft is valued at around $4- to $5-billion. Lyft says it currently completes around 700 million rides per month across 190 cities worldwide. Uber, on the other hand, is worth about 14 times more, or $62.5 billion, and operates in hundreds of cities across 68 countries.
As Forbes points out, in the short-term, the Lyft-GM partnership will function similarly to the partnership Lyft already has with rental car company Hertz, which allows Lyft drivers to temporarily rent Hertz cars in certain markets to drive Lyft customers and make money.
In the long-term, Lyft president John Zimmer told Forbes that they envision a partnership combining GM’s cars with software that allows the car to drive itself, and connects Lyft customers with cars and transportation, among other elements.
The New York Times reports that the new partnership also means GM president Daniel Ammann will join Lyft’s board of directors.
Whereas some might say they see companies like Lyft as an automaker’s biggest threat-since GM’s model is built upon selling individual cars to individual riders, and autonomous transportation seriously threatens the entire idea of car ownership-GM’s Ammann says the automaker is thinking proactively, and wants to be part of the new transportation model of the future.
“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,” Ammann told the New York Times. “From a GM perspective, we view this as much more of an opportunity than a threat.”
