Lyft — the ride-hail service that isn’t Uber — announced today that General Motors has invested $500 million in the company, thus closing Lyft’s latest venture funding round and bringing its new total valuation to $5.5 billion.
That’s encouraging news for a company that ranks a distant second to Uber’s $62 billion valuation and multinational operations. But will it be enough to keep Lyft from going the route of Sidecar, another (albeit much smaller) ride-hail competitor that ceased operations last week?
[jump] GM and Lyft are banking on the idea of self-driving cars as the future of transportation — and also as a means to increase revenue while reducing overhead costs. Nothing new here, as Uber is also developing autonomous vehicles and has even launched an engineering lab at Carnegie Mellon University in Pittsburgh.
What is new is support from the world’s second largest automaker.
According to Fortune, in October GM revealed plans to “deploy a fleet of autonomous 2017 Chevrolet Volts at its Warren Technical Center campus in Michigan, from which GM employees will be able to reserve a car and input a destination using a mobile app. The company’s autonomous technology will drive passengers to their desired destination and park nearby for future use.”
In addition, The New York Times reports that Lyft and GM have another novel idea, too: “G.M. will also 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 logistics aren’t clear yet, but this sounds like a cross between a traditional Hertz-style car rental and Lyft’s current model.
While both Lyft and Uber are determined to seize the driverless car market, the two companies have very different approaches. As BuzzFeed notes, Uber’s method includes developing its own autonomous car technology and building brick-and-mortar research centers, whereas Lyft wants to integrate GM’s already-in-development cars.
Lyft co-founder John Zimmer told BuzzFeed he expects to see the company’s driverless, on-demand cars on the streets within the next 10 years.
(On a related note, click here to read about the labor lawsuit that could change how Uber — and the entire sharing— economy does business.)