General Motors and Lyft to introduce on-demand autonomous vehicles

General Motors Inc. and Lyft Inc. on Monday announced a partnership that will see GM invest $500 million in the ride-sharing startup as part of a joint effort to develop an on-demand network of self-driving cars. But perhaps the most important part is the simplest – General Motors becomes Lyft’s preferred vehicle.

The service will utilise GM’s work on driverless cars with Lyft’s software platform that matches drivers and passengers and calculates routes.

“We see the future of personal mobility as connected, seamless and autonomous”, the Business Times quotes GM President Dan Ammann as saying.

The fundraising, which also involved another $100 million injection from Saudi Arabia’s Kingdom Holding – controlled by the country’s Prince Alwaleed bin Talal – and contributions from Alibaba and Rakuten, takes Lyft’s valuation to $5.5 billion.

For GM, it is “a long-term strategic alliance” which aims to create “an integrated network of on-demand autonomous vehicles in the U”.

John Zimmer, president and co-founder of Lyft, said, “Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives”. In a press release, GM said it would work with Lyft to “leverage GM’s deep knowledge of autonomous technology”. General Motors also has the opportunity to move its vehicles through short-term auto rental hubs.

The final context is that Lyft and GM are going against Uber.

Uber has been developing its own driverless cars with the help of Carnegie Mellon University. The two companies will be working together to set up these hubs so that drivers can rent vehicles for Lyft services.