Lyft and GM – Now In Cahoots

If you were left scratching your head over the news this week that General Motors (GM) is going to invest $500 million into the company with the pink mustache logo, also known as Lyft, you’re not alone.

After reading stories in the Wall Street Journal, the New York Times, etc, it became quite clear – General Motors does not want to be left behind. The urban mobility companies have grown so fast so quick and continue to expand in all directions. This can obviously be frightening to companies, like the big three U.S. auto manufacturers.

GM plans to work with Lyft to set up a series of short-term car rental hubs across the United States, places where people who do not own cars can pick up a vehicle and drive for Lyft to earn money. The president of Lyft, John Zimmer, said, “we strongly believe the autonomous vehicle go-to market strategy is through a network, not through individual car ownership.” GM’s $500 million interest in Lyft is the single largest direct investment by an auto manufacturer into a ride-hailing company in the United States, an alliance that pairs an auto stalwart with the kind of start-up trying to disrupt it.

It appears that companies like GM and Lyft understand that car-sharing and ride-sharing is not a fad and is not going to go away any time soon. For those of us who love our cars, we may very well be a dying breed.

As companies like Lyft and Uber grow and expand, General Motors believes that there will be a demand for drivers that cannot afford to own a car. Naturally, the company wants to be in a position to provide some type of financial arrangement that allows drivers to participate in this transportation revolution.

Uber, with a market cap of $65 billion, operating in 67 or more countries, continues to explode. General Motors and Lyft believe that they can be part of this market explosion.

This investment reflects how much consumer automotive habits have been changed by technology over the last ten years. With the rise of ride-sharing companies, car manufacturers have raced to adapt to how people can now use each other’s vehicles for rides, which could potentially lead to a decline in car ownership. General Motors wants to be part of the changing business models and transportation. They believe that there is going to be more change in world mobility in the next five years than has occurred in the last 50 years.

Uber, Lyft’s ride-sharing rival, all but bought out the robotics team at Carnegie Mellon University last year. These mobility companies will be continuing to push the market by developing their own self-driving automobiles.

The president of General Motors sees the future of personal mobility as being connected, while also seamless and autonomous. And for the naysayers, learn from the past. Some may remember many who believed the Toyota Prius and other electric hybrids would never be attractive to drivers in the United States. Needless to say, we know that was wrong.

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