General Motors and Lyft have announced plans to develop an on-demand network of self-driving cars as the American automaker announced that it would invest $500 million into the ride-sharing service’s latest $1 billion fund-raising round.
The deal comes as automakers are working out how to respond to the rush of technology companies such as Apple, Alphabet and Uber - Lyft’s biggest rival - to control cars of the future and likely reshape the global automotive industry.
The two companies said the partnership, which includes one of GM’s largest investments in another company, stemmed from the shared view that self-driving cars will first reach consumers as part of a ride-sharing service, rather than vehicles owned by drivers.
Dan Ammann, President, GMWe think our business and personal mobility will change more in the next five years than the last 50.
The partnership will tap into GM’s work on driverless cars and Lyft’s software matching drivers and passengers and calculating routes, to create a network of cars that would operate themselves and will be available on demand.
The two companies did not set out a timeline for this on-demand network, but said they would immediately offer Lyft drivers short-term rentals of GM cars.
The latest funding round valued it at $5.5 billion, cementing its status as one of the companies worth more than $1 billion without going public, According to Lyft.
The company is locked in a fundraising race with rival ride-hailing app Uber Technologies Inc. Lyft said it has raised a total of $2 billion since August 2013. Uber is reportedly in the midst of a $2.1 billion funding round that would value it as high as $64.6 billion.
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