The strategic partnership between GM and Lyft enables GM to protect itself from risk. It grants GM access to a market where traditional individual auto ownership is no longer an option.
Why General Motors Is Investing $500 Million in Lyft?
- Lyft, an Uber rival, will receive $500 million from General Motors, the automaker revealed on Monday. Lyft is now valued at $5.5 billion after receiving the first $500 million of a $1 billion fundraising round.
- Why is GM, one of the Big Three American automakers, funding an on-demand ride-hailing business? After all, people are less likely to purchase their own vehicles the more they use services like Lyft. The solution: automated vehicles. In a statement, GM President Dan Ammann stated, "We view the future of personal transportation as connected, seamless, and autonomous." "We believe we can successfully realize this goal more quickly if GM and Lyft collaborate," the company said.
- In Detroit, the "future of mobility" idea is flourishing. For example, Ford CEO Mark Fields has been discussing "smart mobility" for at least a year. The Dearborn, Michigan-based startup is experimenting with concepts including Internet-connected bicycles and car-sharing apps. Along with other automakers, it too has created a location in Silicon Valley.
- When considered collectively, these actions and others show that automakers are aware that a potentially huge paradigm change is about to occur in how we view automobiles and transportation. The American dream has included a suburban home with a garage large enough to fit one, two, or even three cars for decades.
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