News

Lyft Snags Big Funding, Partners With GM On Self-Driving Cars

Lyft — Uber’s best known rival in the U.S. and global market — has gotten 2016 started off with a bang.

The ridesharing firm announced earlier today (Jan. 4) closing a $1 billion Series F round, half a billion of which came care of GM. That brings Lyft’s total valuation up to $5.5 billion.

So why the big investment from General Motors?

According to reports, the newest investment round will go toward financing a connected network for self-driving cars.

The other half billion was, as reported last week, supplied by Saudi Prince Al-Waleed’s Kingdom Holding Company, Janus Capital Management, and previous investors Didi, Rakuten, and Alibaba.

GM has been working on self-driving vehicle technology for several years and has plans to start testing the autonomous Chevy Volts at several of their corporate campuses nationwide later this year. The tie-in with Lyft is a long-term strategic investment that will allow the two firms to create a fleet of ownerless vehicles for consumer use.

There is not official data available from GM as to when these cars might be available for consumer purchase.

“We’ve seen the growth in the ridesharing space and in particular, Lyft is growing faster than anybody else,” GM president Dan Ammann explained about the investment to TechCrunch.

“With GM and Lyft working together, we believe we can successfully implement this vision more rapidly,” Ammann said.

The pair-up also dovetails nicely with the views of Lyft CEO Logan Greene, who has noted that he does not believe consumers will individually purchase self-driving cars, but that they will be desirable to customers who don’t want to own cars so much as they want continuous access to them.

The new pair-up, however will do more than make self-driving cars eventually available at the click of button. Starting immediately, GM will also be providing Lyft drivers with “rental hubs” as providers of short-term vehicles. This move seeks to serve those who might wish to be ridesharing drivers who are unable or unwilling  to take on the expense of car ownership.

Drivers who take on rentals from GM will be provided with OnStar services (emergency, security and nav services). That rental agreement for human drivers will likely disappear when Lyft and GM roll out the self-driving cars.

Lyft is not alone in the march toward a more automated future. Rival Uber is also taking on the self-driving issue, but instead of seeking out partnership with an established auto player, the world’s best capitalized ridesharing service is looking to build out its own fleet.

Which play will work better? Hard to say this early. Uber is bigger, more international, more able to expand and worth more (with a bigger bank account). But Lyft has the not inconsiderable sum of a billion dollars to work with and a pretty serious and intimidating partner in its corner. The race will be interesting, if nothing else.

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

TRENDING RIGHT NOW

To Top