GM’s Investment into Lyft is paying off, but partners are free to play the field
General Motors has reaped financial benefits and learnings from its $500 million investment in the ride-hailing company Lyft Inc.; however, the long-term parameters of the GM Lyft partnership between the two remain uncertain.
GM President Dan Ammann, a Lyft board member who was instrumental in putting together the investment, says the automaker has not yet “fully defined” the paths to plans it announced last month to launch commercial autonomous vehicles at scale beginning in 2019, including what role Lyft would play.
“What we’ve said is, we will have probably some combination of our own full capability on the one hand, potentially supplemented with some partnerships on the other,” he told Automotive News last week
When the deal was struck, GM and Lyft cast it as a “long-term strategic alliance to create an integrated network of on-demand autonomous vehicles in the U.S.” But the relationship between the two has grown increasingly complicated as each company has pursued other partnerships with overlapping business lines.
Lyft is increasingly partnering with and being funded by companies that rival GM, such as Ford Motor Co. and an investment unit of Google parent company Alphabet Inc., which is also a partner with Fiat Chrysler Automobiles through its self-driving-car unit, Waymo.
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Google’s parent company is leading a $1 billion round of investment that raises Lyft’s valuation to $11 billion. Another Alphabet company, Waymo, is developing self-driving cars and partnered with Lyft earlier this year, presumably for the infrastructure that will allow it to find customers for the service that looks set to launch in Phoenix, Arizona.
Lyft has been putting together a host of partnerships of late, an Android-like strategy that is positioning the company well for the coming years. Lyft has become a recognized and trusted brand, which is critically important when trying to get customers to choose you over a rival like Uber. Lyft has also inked deals with Jaguar Land Rover and Ford, and General Motors invested $500 million in the company last year.
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In the latest twist, General Motors’ relationship with Lyft is said to have chilled to the point that it’s making overtures rival to ride-hailing service Uber.
The biggest U.S. automaker is discussing a plan to put autonomous vehicles developed by its Cruise unit into a program operated by Uber in 2018. Kyle Vogt, CEO of San Francisco-based Cruise has also been tasked with creating a ride-hailing service for GM that would potentially compete with Lyft and Uber, the report said.
GM invested $500 million in Lyft in early 2016 and owns about 9% of the company. Dan Ammann, the carmaker’s president, sits on Lyft’s board. When they formed the partnership a key goal was to create an autonomous, on-demand vehicle network.
“We see the future of personal mobility as connected, seamless and autonomous,” Ammann said in a Jan. 4, 2016, statement. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”