Last week, I wrote that with Sidecar hitting the skids, it would be up to Lyft to keep Uber innovative...and challenge their supremacy as the largest player in the rideshare sector. However, with a valuation that’s a fraction of Uber’s $62.5 billion, it will take a near-miracle for Lyft to truly rival their black and gray counterpart.
But, while not quite a miracle, the $500 million General Motors (GM) just sunk into the pink mustache certainly doesn’t hurt.
New Investor Coming to the Table for Lyft
Earlier today, Lyft announced that G.M. invested $500 million in the company - precisely half of the company’s latest $1 billion venture capital-raising round. The funding boosts Lyft to a valuation of no less than $4.5 billion. Perhaps even more intriguing than their financial backing, though, is G.M.’s interest in developing an “autonomous on-demand network of self-driving cars,” an announcement of sorts that the big three auto giant is ready and willing to face off against the likes of Google (GOOG), Tesla (TSLA), and Uber.
Cementing the odd partnership of old school automaker and hot young upstart even further, President of G.M. Daniel Ammann will join Lyft’s board of directors, and G.M. will work with Lyft to set up a series of short-term car rental hubs across the US. At these hubs, people who are interested in driving for Lyft, but who don’t own a car, can pick up a vehicle and drive for Lyft to earn money.
The New Adventures of Old G.M.?
In all, this feels like a very forward-thinking move from a company that infamously cast a blind eye to changes in the marketplace until it literally bankrupted the global behemoth. One can’t help but imagine the old General Motors viewing Lyft - and the concept of ridesharing in general - as an irritating pest that must be squashed, as opposed to an inevitable shift..
.and a potentially massive long-term opportunity.
“From a G.M. perspective, we view this as much more of an opportunity than a threat,” Ammann said in a recent interview.
Well, there you go - it seems we’re finally dealing with a General Motors that’s focused on success (or at least, survival) in the future, rather than a Quixotic obsession with the past.
Suddenly, Uber’s unrivaled dominance in the rideshare market is beginning to look a lot more rivaled...
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