GM Invests $500 Million In Lyft To Build Self-Driving Car Network

Jan 06, 2016 11:42 AM EST | John Nassivera

General Motors and Lyft announced Monday that they will be working together to create a national network of self-driving cars.

The partnership will see GM invest $500 million in the ride-sharing service, join the startup's board of directors and provide cars for short-term use to its drivers, according to WIRED.

The announcement also shows the Detroit-based automaker's willingness to engage in more advanced forms of transportation, such as automated driving and smartphones that connect passengers with drivers. Players in this game include Lyft, Uber, Google and possibly Apple.

"We see the future of personal mobility as connected, seamless and autonomous," GM President Dan Ammann said. "With GM and Lyft working together, we believe we can successfully implement this vision more rapidly."

Lyft's venture with GM will give the company a chance to achieve its goal of providing a new form of transportation that would have fewer cars on the road, The New York Times reported.

Such a service would provide a driverless Lyft car at a consumer's request and help them avoid the cost of a driver and use a rental car, ExtremeTech noted. The partnership also gives GM some help in advancing its self-driving car project.

The short-term car hubs will be set up in areas where people who don't own cars will be able to get a car and drive for Lyft for money.

"We strongly believe that autonomous vehicle go-to-market strategy is through a network, not through individual car ownership," Lyft President John Zimmer said in an interview.

PitchBook data also shows that GM's $500 million investment is the single largest direct investment by an automaker into a ride-sharing service in the U.S.

This isn't the first time that GM has worked with an auto-related startup, as it teamed up with car-sharing marketplace RelayRides in 2011 so that car owners could rent GM vehicles that aren't being used, according to The New York Times. Similar deals included one with Ford and fellow car-sharing marketplace startup Getaround last year and another with Daimler and rental service Car2Go.

Ammann said in an interview that GM is intent on changing business models in transportation. "We think there's going to be more change in the world of mobility in the next five years than there has been in the last 50," he said.

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