General Motors Invests $500 Million In Lyft
Lyft said Monday that GM invested $500 million in the company as part of a round of a $1 billion round of fund-raising.
GM gets a seat on Lyft’s board and access to the three-year-old company’s software, which matches riders with drivers and automates payments. It also becomes a preferred vehicle provider, with the chance to get many more people behind the wheel of a Chevrolet, Buick, GMC or Cadillac.
San Francisco-based Lyft gets the expertise of a 108-year-old 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. Lyft operates in 190 U.S. cities, although it recently formed partnerships with ride-sharing services in China and India.
Together, the companies plan to open a network of U.S. hubs where Lyft drivers can rent GM vehicles. That could expand Lyft’s business by giving people who don’t own cars a way to drive and earn money through Lyft. It will also give GM a leg up on competitors like Daimler and Ford Motor, who are developing their own ride-sharing services.
Longer 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 arch-rival, Uber Technologies, which is working on its own driverless cars.
Lyft Co-Founder and President John Zimmer and GM President Dan Ammann say the two companies began serious discussions about three months ago. Both see big changes coming in the traditional model of car ownership, and they had similar ideas about how to address it.
Uber might want to watch their back because they have some stiff competition in the new year…