Lyft, GM Forge $500M Partnership Toward Self-Driving Cars

GM is making a $500 million bet that it can use Lyft’s rideshare technology to provide self-driving cars to customers. A spokeswoman for Lyft says it’s yet to be determined whether Lyft or GM will own the self-driving cars. The GM-Lyft partnership is the latest collaboration between Detroit and Silicon Valley; late last month news broke that Ford and Google would be teaming up to work on, you guessed it, autonomous cars.

The development of a network of on-demand autonomous vehicles will combine GM’s advancing autonomous technology and Lyft’s platform of ride-sharing services.

Rideshare startup Lyft announced a $1 billion round Monday led by General Motors, money that will be invested in developing the world’s first self-driving taxi service.

On Lyft’s side of the deal they now get the help of an experienced and mature company like GM who has been in the auto-making business for over 100 years.

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”. Kingdom and Alwaleed are major investors in USA tech companies; together they own more than 5 percent of Twitter Inc., for example. An automated vehicle service is still a long way off, but in the meantime the companies will work on a network of rental hubs around the country where Lyft drivers can rent vehicles on a short-term basis.

In the immediate future, GM will be a preferred provider of short-term-use cars for Lyft drivers. As part of the deal, GM will also hold a seat on Lyft’s board of directors. Since 2013, the company has raised more than $2 billion. Janus Capital Management, Rakuten, fellow ridesharing service Didi Kuaidi, and Chinese retail giant Alibaba also accounted for the $400 million funding balance.

Lyft was valued at $4.5 billion following GM’s funding, 14 times less than Uber’s $62.5 billion value, according to the NY Times.