General Motors has agreed to invest US$500 million in Lyft, and the companies will work together to develop an integrated network of autonomous vehicles, they said in a joint announcement on Monday.
As part of the agreement, GM will become a preferred provider of short-term vehicles to Lyft customers, and it will provide them with its OnStar vehicle location services.
GM will gain a seat on the Lyft board of directors.
The companies see the future of personal mobility as “connected, seamless and autonomous,” and they believe they can reach that goal more rapidly by working together, said GM President Dan Ammann, pictured above (center) with Lyft cofounders John Zimmer (right) and Logan Green (left).
Self-Driving Space Revs Up
The investment is part of Lyft’s overall $1 billion capital raising effort, the company said, which includes $100 million from Saudi-based Kingdom Holding and several new and existing investors, including Janus Capital Management, Rakuten, Didi Kuadi and Alibaba.
The Kingdom contribution brings the company’s investment total to $250 million, Lyft said.
Lyft — the second largest ride-sharing service in the U.S., behind Uber — provides more than 7 million rides per month in 190 cities nationwide, according to company figures.
GM is the latest automaker to jump into the autonomous vehicle space, which is under development on a number of fronts, in a bid to compete with Google, which has taken the lead in promoting this promising new industry to consumers.
“This shows GM is paying attention to that and positioning itself for when that day comes,” said Egil Juliussen, a principal analyst at IHS.
Toyota late last year announced a $1 billion plan to invest in robotics and artificial intelligence. Other automakers, including Tesla, have begun testing autonomous vehicles.
Google, which has led the industry in this space, last year hired industry veteran John Krafcik, the former chief of Hyundai’s U.S. operations, to lead its autonomous vehicle unit.
“We’ve talked in this space to a number of companies,” said Vijay Iyer, spokesperson for GM’s Global Connected Customer Experience and Urban Mobility business.
“I think it complements what we do quite well,” he told the E-Commerce Times.
GM Wades Into the Pool
GM last fall signaled plans to expand its development in the self-driving space, announcing that it would provide a fleet of autonomous 2017 Chevrolet Volts for use at it’s Warren( Mich.) Technical Center campus.
The “supercruise” autonomous vehicle feature, which has been undergoing tests since 2012, will be available in its 2017 Cadillac CT6 vehicles, GM said.
GM joined with Google in 2014 to test a ride-sharing service that utilized Chevrolet Spark electric vehicles, and it announced a New York City program called “Let’s Drive NYC.” Residents of the Ritz Plaza, a 479-unit luxury residence in Times Square, were given access to Chevrolet Trax and Equinox vehicles and parking at 200 Icon Parking System garages around the city for up to three hours a month, with additional time priced at $10 an hour.
GM also worked with dealerships in Europe to launch a ride-sharing program called “CarUnity” with its Opel brand.
The company has been testing a ride-sharing program at Jiao Tong University in Shanghai, with a fleet of EN-V 2.0 electric concept vehicles.
The potential market for autonomous vehicles is massive, IHS’ Juliussen told the E-Commerce Times, as about 1.1 billion of the world population of almost 7 billion are licensed drivers.
There is a massive market of potential customers who cannot drive their own vehicles, he pointed out, ranging from those who cannot afford to own their own cars, to members of two-income households who may not need two full-time cars, as well as senior citizens and disabled individuals who cannot drive their own vehicles.