GM invests $500M in Lyft
Partnership could lead to on-demand, self-driving cars.
detroit» The automotive industry is placing its biggest bet yet that using a device to hail a ride — with or without a driver — is the future of transportation.
General Motors Co. said Monday it is investing $500 million in ridehailing company Lyft Inc. and forming an unprecedented partnership that eventually could lead to on-demand, self-driving cars. It’s the largest investment yet by a traditional automaker in a new mobility company and is an acknowledgment by GM that the transportation landscape is changing fast.
“We see the world of mobility changing more in the next five years than it has in the last 50,” GM president Dan Ammann said.
GM made the investment as part of a $1 billion round of fundraising by Lyft. Together, the companies plan to open a network of U.S. hubs where Lyft drivers can rent GM vehicles at discounted rates. That could expand Lyft’s business by giving people who don’t own cars a way to drive and earn money through Lyft. It also gives GM a leg up on competitors such as Daimler AG and Ford Motor Co., who are developing ride-sharing services. And it would put more young drivers behind the wheel of a Chevrolet, Buick, GMC or Cadillac.
In the long term, GM and Lyft will work together to develop a fleet of autonomous vehicles that city dwellers could summon using Lyft’s mobile app. Partnering with GM could give Lyft a boost over its rival, Uber, which is working on its own driverless cars. Uber last month launched a pilot program in Denver with Enterprise Rent-A-Car that allows potential drivers who don’t have vehicles to lease a car by the month or week.
Kelly Blue Book analyst Karl Brauer expects to see automakers and tech companies form more partnerships over the next few months. “Each one has an area of specialization to make both of them stronger.”
GM isn’t the only automaker with an eye on Lyft. Fontinalis Partners — a venture capital firm cofounded by Ford executive chairman Bill Ford — invested in Lyft in May. The amount invested wasn’t disclosed.
GM gets a seat on Lyft’s board and access to the 3-year-old company’s software, which matches riders with drivers and automates payments. The partnership also better positions the automaker for a future in which customers don’t buy cars every five or six years but share rides or hail drivers when they need to get somewhere.
San Francisco-based Lyft gets the expertise of an automaker with decades of experience in making connected and autonomous vehicles. Detroit-based GM also has an enviable global reach; it sells almost 10 million cars each year in more than 100 countries.