Lyft/GM Partnership To Put Self-Driving Cars On The Road Within A Year by Kyle Stanford, PitchBook
In less than a year, General Motors (NYSE: GM) and Lyft are planning to roll out a pilot program for a fleet of self-driving electric cars for the ridesharing service. The two companies have been working in a partnership developed from a $500 million investment made by GM as part of Lyft’s $1 billion financing round closed early this year. The duo has already given Lyft drivers in Chicago an opportunity to lease GM’s Chevy Equinox SUV model. But the new test program is undoubtedly more important for the two companies as it will incorporate the technology gained in GM’s recent $1 billion purchase of Cruise, a developer of car-mounted technology designed to enable any car to become autonomous.
If successful, the program could be a game-changer for both companies. Lyft is locked in a fierce battle with U.S. rival Uber, which has raised billions more in capital and is privately valued at roughly 11.5x Lyft’s already lofty $5.5 billion valuation. Self-driving electric vehicles have the potential of lowering Lyft’s cost of business, as well as allowing the company to regulate the number of available rides in a city, keeping prime-time rates lower and grabbing customers from more expensive services. For GM, not only will the program provide a test for the technology it paid $1 billion for, but it will also provide real-world R&D for its electric model, Bolt, which hasn’t seen the demand GM had hoped for and will be the primary car used in the pilot program.
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With the year-long timeline for the initiation of this program, however, Lyft and GM are sure to face competition from others looking to grab market share. Uber, with its deep coffers of VC, has already been developing autonomous technology; its CEO Travis Kalanick has even gone as far as stating that Uber’s fleet would be fully autonomous by 2030. But others outside of the current ridesharing market also figure to mix into the future of the industry. Both Google and Apple have committed R&D teams designing autonomous technology. Google has even deployed its own self-driving car fleet around Silicon Valley (though it has the distinction of being involved in the first autonomous vehicle-related accident) and last week entered into a minivan-supply agreement with Fiat Chrysler Automobiles.
After all the hype around self-driving cars, something big is finally happening. Whether we’re ready or not, the self-driving world is at our doorstep.
Lyft – General Motors Partnership