GM's Dan Ammann, center, is all smiles after announcing the maker is investing $500 million with ride-sharing company Lyft.
Recently, General Motors officials noted that they believed that most folks will have their first experience with autonomous vehicles while using a ride-sharing service. Today, the company put $500 million of its money where its corporate mouth is by investing in Lyft, Inc.
The big money investment – the maker’s largest single investment in another company – is aimed at developing a fleet of self-driving ride-share vehicles. In addition to the working partnership, GM also gets a seat on Lyft’s board of directors.
“We see the future of personal mobility as connected, seamless and autonomous,” said GM President Dan Ammann. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”
The addition of GM comes as Lyft is in the midst of a $1 billion fund-raising effort to grow its business. In addition to GM, other investors include Kingdom Holding Co., the investment firm of Saudi Prince Alwaleed bin Talal, which invested $100 million.
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Janus Capital Management, Japanese online retailer Rakuten Inc, ride-hailing service Didi Kuaidi and Chinese Internet giant Alibaba Group Holding Ltd. are among the other investors.
However, the tie-in with GM is perhaps the most beneficial as it gives the ride-sharing company a real-world test bed to exploit.
GM and Lyft said the partnership would tap into GM’s work on developing autonomous vehicles and Lyft’s software that automates matching drivers and passengers, routing and payments to create a network of cars that would operate themselves and be available on demand.
The two companies declined to provide a timeline for when this this on-demand network would begin. But they said the partners would immediately offer Lyft drivers short-term rentals of GM cars to use to offer the service.
(Click Here to see why Tesla thinks its autonomous technology may make it a ride-share leader.)
“Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives,” said John Zimmer, president and co-founder of Lyft. “Together we will build a better future by redefining traditional car ownership.”
Key elements of the GM and Lyft alliance include:
- 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 GM-Lyft alliance follows news of a Ford-Google alliance, both of which are only the beginning of a series of automaker-tech tie-ups we’ll see in the coming months,” said Karl Brauer, senior analyst at Kelley Blue Book’s KBB.com.
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“The rapidly-shifting nature of personal transportation has traditional car companies scrambling to position themselves for an uncertain future. It’s also creating an unprecedented opportunity for technology companies, assuming they can master autonomous technology while finding an effective partner to provide the hardware.”