From being a minority investor in Lyft, General Motors has now expressed interest in acquiring the ridehailing company — but Lyft declined the proposal, a report by The Information reveals.
GM's acquisition bid suggests the carmaker is hoping to foray deeper into the ridehailing sector, and combine Lyft's carpooling business model with the concept of autonomous vehicles.
In an age where commuters find it's so much easier to hail a ride and carpool, car manufacturing companies like GM have been struggling to find alternative models of car sharing and car ownership. GM hit its stride partnering with Lyft, though, and this initial success may have pushed the carmaker to make the offer.
GM in January poured in a $500 million investment for a 9 percent stake in Lyft. Now, the carmaker seems to be revving up for more ambitious plans with the ridehailing service, but Lyft may not have been impressed.
According to sources familiar with the matter, Lyft rebuffed the offer after soliciting other prospective buyers.
The ridehailing company, which is currently worth $5.5 billion, will opt for another funding round instead, since it reportedly requires billions of dollars more in investment to compete with Uber, the industry leader gaining ground in the global market.
Uber, however, recently sold its Chinese operations to Asian rival Didi Chuxing. The American ridehailing company was reportedly losing $1 billion yearly as it failed to dominate the China market, and the agreement will supposedly enable Uber to refocus on autonomous driving and artificial intelligence instead. The company will also use the money to continue tapping into other international markets, such as Europe and other parts of Asia, while boosting its presence in the U.S.
Lyft's own future has been questioned by market observers, especially after it enlisted Silicon Valley boutique investment firm Qatalyst Partners. The firm has been tasked with either handling a funding round for Lyft or planning the sale of the ridehailing company.
As partners, GM and Lyft have achieved relative success in their initial projects. The companies' Express Drive vehicle rental program, for instance, allows Lyft drivers to pull out short-term leases on GM units. The program has picked up and is expanding into three more key cities in the United States before it ventures into other countries.
The two companies are said to be "happy with the alliance and the progress made to date," GM tells Fortune, but both have yet to issue official statements on the supposed acquisition bid.