Automaker General Motors Inc will invest $500 million in ride-sharing service provider Lyft Inc as part of an alliance to jointly create a network of on-demand self-driving cars, the two US companies said on Monday.
The deal, part of Lyft’s $1 billion fundraising round, is the first such tie-up between an automaker and a cab-hailing service.
“We see the future of personal mobility as connected, seamless and autonomous,” GM President Dan Ammann said in a statement. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”
While the two companies didn’t provide any timeline for building a network of self-driving cars, they said that GM will become a preferred provider of short-term use vehicles to Lyft drivers through rental hubs in various cities in the US with immediate effect.
GM and Lyft will also provide each other’s customers with personalised mobility services and experiences through their respective channels.
As part of the transaction, GM will hold a seat on Lyft’s board of directors.
In a separate statement, Lyft said its $1 billion funding round includes an investment of $100 million by Saudia Arabia’s Kingdom Holding Company. Several new and existing investors including Janus Capital Management, Rakuten, Didi Kuaidi and Alibaba also invested in this round. Lyft is now valued at $5.5 billion, it said.
Lyft claims it completes 7 million rides a month in more than 190 cities. In October, the ride-sharing firm reached an annual gross run rate of $1 billion. Since 2013, the company has raised more than $2 billion.
Lyft was founded in June 2012 by Logan Green and John Zimmer. It competes mainly with San Francisco-based Uber Technologies Inc. In December, Lyft joined hands with India’s Ola, China’s Didi Kuaidi and Southeast Asia-focused GrabTaxi to take on Uber.
GM is one of the world’s largest automakers and sells vehicles under the Chevrolet, Cadillac, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands.