General Motors believes that autonomous vehicles may be the next big thing to happen to ride-hailing services, and is putting up major bucks behind one of the companies to help develop a system.
The ride-hailing company Lyft announced on Monday a partnership with General Motors, revealing that GM invested $500 million in its company as part of of $1 billion round of fund raising.
The partnership is a sweet deal for both companies. GM, which now has a seat on Lyft's board, will get access to the ride-hailing company's software, whereas Lyft will have GM's expertise — especially when it comes to autonomous vehicles to separate itself from competitors like Uber in the future. As part of the new partnership, the two will focus on developing a self-driving car system.
It's only a matter of time before customers request a car to come to pick them up from an app and it's an autonomous vehicle that pulls up. Since GM has been developing autonomous vehicles, and Lyft is one of the popular ride-sharing apps, it only makes sense that the companies would work together for this common goal.
The two companies will work together to create what they call the Autonomous On-Demand Network that aims at integrating self-driving cars into everyday life.
"We see the future of personal mobility as connected, seamless and autonomous. With GM and Lyft working together, we believe we can successfully implement this vision more rapidly," GM president Dan Ammann said in a press release.
Lyft and GM are also planning on creating rental hubs that would allow potential Lyft drivers who don't own their own cars to rent a vehicle for a short period of time so that they, too, can earn a living. That means more drivers will get to sit behind the wheel of popular GM vehicles like a Chevrolet or Cadillac.
Lyft also announced other investors as part of this round including Kingdom Holding Company, Janus Capital Management, Rakuten, Didi Kuaidi and Alibaba. Following this round, Lyft is now valued at $5.5 billon.