GM Invests in Lyft
The big news of the day in the autonomous vehicle world is that GM has invested $500 million in Lyft.
This is obviously a huge investment, and a strategic investment, different than if a generic financial firm had fronted the cash.
“GM and Lyft said they will work together to develop a network of self-driving cars that riders can call up on-demand,” reports the Charlotte Observer.
“More immediately, America’s largest automaker will offer Lyft drivers vehicles for short-term rent through various hubs in U.S. cities.”
A driver in this transaction is certainly a fear that self-driving cars, combined with ride-sharing services, will up-end GM’s business model.
“Traditional automakers’ reluctance to make bold moves is linked to the fact that self-driving technology could fundamentally undermine the auto industry’s core business model: selling cars to people.”
The Huffington Post reports that the average cost per year to own a car is $8,698, and that the average car owner only uses the car 5% of the time. Rent-a-car, in the form of Uber and Lyft, is coming soon to a family near you.
Originally published at www.davidincalifornia.com on January 4, 2016.