January 5, 2016
Ride-hailing service Lyft announced yesterday that General Motors recently invested $500 million in the San Francisco-based startup. The investment represents half of Lyft’s latest venture financing round, which values the company at $4.5 billion. GM and Lyft will work together to develop an on-demand network of autonomous vehicles, taking on companies such as Google, Tesla and Uber in the process. In addition, the two companies are planning short-term car rental hubs that would provide work opportunities for potential Lyft drivers who do not have their own vehicles.
GM’s $500 million marks the single largest direct investment in a U.S. ride-hailing startup by an automobile manufacturer.
GM president Daniel Ammann will join the Lyft board. “We strongly believe that autonomous vehicle go-to-market strategy is through a network, not through individual car ownership,” said John Zimmer, president of Lyft.
“With the rise of ride-sharing companies, car manufacturers have raced to adapt to how people can now use each other’s vehicles for rides, which could potentially lead to a decline in car ownership,” notes The New York Times. “The shifts have started a spate of partnerships between carmakers and auto-related startups,” including deals between GM and RelayRides, Ford and Getaround, and Daimler and Car2Go.