General Motors Inc. said Monday it will invest US$500 million in Lyft Inc. and laid out plans to develop an on-demand network of self-driving cars with the ride-sharing service.
The biggest single Detroit-Silicon Valley crossover deal to date comes as carmakers work out how to respond to the rush of technology firms such as Apple Inc., Alphabet Inc. and Uber Technologies Inc. — Lyft’s biggest rival — to control cars of the future and likely reshape the global vehicle industry, Reuters reported.
The No. 1 US carmaker’s investment accounts for half of Lyft’s latest US$1 billion fundraising round.
It is one of GM’s biggest investments in another company and the largest single cash injection to date by a traditional carmaker in a young technology firm.
The two companies said the partnership was based on the shared view that self-driving cars will first reach consumers as part of a ride-sharing service, rather than vehicles owned by drivers.
“We think our business and personal mobility will change more in the next five years than the last 50,” GM president Dan Ammann told Reuters.
The partnership will tap into GM’s work on driverless cars and use Lyft’s software, which matches drivers and passengers and calculates routes, to create a network of cars that would operate themselves and be available on demand.
The two companies did not set out a timeline to get the on-demand network up and running, but said they would immediately offer Lyft drivers short-term rentals of GM cars.
The announcement came as Toyota Motor Corp. and Ford Motor Co. said they would adopt the same software to link smartphone apps to vehicle dashboard screens.
Toyota and Ford, two of the world’s biggest carmakers, invited rival car companies to join them to counter the push by Apple, Alphabet, Tesla Motors Inc. and others into self-driving cars, or what the industry calls autonomous vehicles.
Lyft said investors in its latest US$1 billion fundraising round include Kingdom Holding Co., the investment firm of Saudi billionaire Prince Alwaleed bin Talal, which put in US$100 million.
Other investors include Janus Capital Management, Japanese online retailer Rakuten Inc., Chinese ride-hailing service Didi Kuaidi and internet giant Alibaba Group Holding Ltd.
– Contact us at [email protected]