- General Motors will invest $500 million in Lyft to create an integrated network of on-demand autonomous vehicles in the US.
- The investment is the biggest move to date by a car maker to enter the very fast growing ride sharing industry.
- General Motors believes that the first large-scale deployment of autonomous vehicles will be in this kind of on-demand, ride-share platform.
- Self-driving cars on demand, able to pick up users in minutes at the tap of a phone app, are poised to have a huge impact and radically change cities by reducing the need for owning a car.
GM and Lyft announced a long-term partnership to create an integrated network of on-demand autonomous vehicles in the US. General Motors will invest $500 million in Lyft's fast-growing ride sharing service, and hold a seat on Lyft’s board of directors.
Bloomberg Business notes that the investment is the biggest move to date by a car maker to enter the very fast growing ride sharing industry. Lyft, founded in 2012, is Uber's main competitor and the fastest growing ride sharing company in the US, available in more than 190 cities. According to the company, Lyft is preferred by drivers and passengers for its safe and friendly experience, and its commitment to driving positive change for the future of cities.
"We see the future of personal mobility as connected, seamless and autonomous," said General Motors President Dan Ammann. "With GM and Lyft working together, we believe we can successfully implement this vision more rapidly." In an interview, he added that General Motors will unveil the production version of its Chevrolet Bolt in Las Vegas this week, a car aimed at taking on Tesla (NASDAQ:TSLA) in the long-range electric vehicles segment, The Wall Street Journal reports. "We believe that the first large-scale deployment of autonomous vehicles will be in this kind of on-demand, ride-share platform," said Ammann commenting on the Lyft partnership announcement.
General Motors (NYSE:GM) has been relatively quiet about its efforts to develop self-driving cars. But the company is no newcomer to autonomous driving technology, which it started exploring almost a decade ago when it collaborated with Carnegie Mellon University for an autonomous vehicle competition sponsored by DARPA. General Motors plans to introduce a semi-autonomous feature that will let a car handle itself on the freeway in a Cadillac model in 2016, Wired reported in October, and is working to deploy a fleet of robo-Volts at its Warren Technical Center.
The future of transportation is changing rapidly and the partnership will play a role in redefining traditional car ownership and improving city life through more affordable, accessible and enjoyable transportation, notes a Lyft blog post. The two companies plan to build a network of on demand autonomous vehicles that will make getting around more affordable, accessible and enjoyable. General Motors will also establish a series of national rental hubs where Lyft drivers can access short-term vehicles, unlocking new ways for people to earn money without having to own a car.
"This raise and collaboration with GM are exciting milestones in our three-year history that continue Lyft's leadership in redefining traditional car ownership," said Lyft's president and co-founder John Zimmer. "We are thrilled to take this momentum into the new year and continue improving life in our cities through more affordable, accessible and enjoyable transportation."
The autonomous car sector is becoming crowded, with the participation of more and more traditional car makers, including Ford Motor (NYSE:F), Toyota Motor Corp (NYSE:TM), Daimler, and Hyundai, as well as innovative Silicon Valley companies such as Apple (NASDAQ:AAPL) with its secret self-driving car project, and Tesla (NASDAQ:TSLA) with its accelerating development of luxury all-electric autonomous cars. All these companies predict commercial self-driving cars on the roads by the end of the decade.
Ford, which announced that it is joining the race to developing self-driving cars, is expected to announce a partnership with Alphabet to build self-driving vehicles with Google’s technology at the Consumer Electronics Show (CES) in January.
Alphabet Inc-C (NASDAQ:GOOG) itself, which is the technology leader in the autonomous driving sector, plans to spin off its self-driving car unit as a stand-alone business under the Alphabet corporate umbrella next year. According to credible rumors, the new Alphabet company will offer rides for hire, with a business model similar to that of Uber and Lyft.
These developments confirm Amigobulls' predictions for the self-driving car sector. All seems to indicate that self-driving cars on demand, able to pick up users in minutes at the tap of a phone app, are poised to have a huge impact and radically change cities by reducing the need for owning a car. The car makers who realize that and start making sensible investments in autonomous driving are likely to be the leading car makers of the next decade. By combining autonomous driving technology with the very successful business model of Lyft and Uber, General Motors is well positioned.