General Motors has announced it is investing $500million in Uber’s rival Lyft.
The firms are set to work together over the mid to long term to develop a network of self-driving cars which people will be able to order via their smartphones.
They say it will make getting around
more affordable, accessible and enjoyable.
In the shorter term, GM will also provide a series of ‘hubs’ around the US where Lyft drivers can rent vehicles on short-term hire agreements.
It means more people will be able to earn money by working for Lyft even if they don’t own their own vehicle.
The deal will also give Lyft access to GM’s technology systems including OnStar.
GM President Dan Ammann, who takes a place on the Lyft board as part of the deal, said:
We see the future of personal mobility as connected, seamless and autonomous. With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.
The investment is part of a $1billion financing round for Lyft and means the start-up at around $5.5billion.
The companies hope the deal will allow them take on Uber Technologies Inc in the battle to provide a network of self-driving cars that drivers can call up whenever they need one.
Although still a few years away, it’s expected that self-driving cars will completely transform the cab and ride-sharing industry.
Lyft, which works by connecting drivers with people who need a lift, was founded just three years ago by John Zimmer and Logan Green.
It is the fastest-growing rideshare network in the US, currently providing around 7million rides a month in more than 190 cities.
This raise and collaboration with GM are exciting milestones. Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives. Together we will build a better future by redefining traditional car ownership.
Also involved in the $1billion Series F financing round were Kingdom Holding Company, who invested $100million and now have a total investment of around $250million, along with new and previous investors including Alibaba, Rakuten, Didi Kuaidi, and Janus Capital Management.