Uber’s US based cab aggregator rival Lyft has recently raised another staggering $1 Billion in a round of funding led by General Motors, which contributed almost half of the massive funds, with the other half raised by various other prominent corporations including Saudi Prince Al-Waleed’s Kingdom Holding Company, Janus Capital Management, Didi etc.
The company will deploy these funds raised for the development of its pre-existing relationship with GM and will assist the latter in its plans of building a connected and self-driving car service.
The acceptance of the funds from GM is particularly significant for Lyft, whose CEO Logan Greene is known to have remarked once that most people wouldn’t buy self-driving cars. Well, since the company can hardly be expected to go ahead with a doomed enterprise, it seems as if its views on the matter has undergone significant deviation.
So what is the deal with GM and Lyft joining hands? After all, while both companies run car based businesses — The former manufacturers them and the latter offers them for transport — their verticals are quite different. Well it seems like GM saw the deal as an opportunity to jump in on the whole cab-hailing business, which has been proving to be more lucrative than anyone previously imagined. Speaking on the topic to Techcrunch, GM president Dan Amman said,
We’ve seen the growth in the ridesharing space and in particular, Lyft is growing faster than anybody else.
Lyft on the other hand — Well, assuming that self-driving cars do become the rage in the future — and hanging any further developments — which cab aggregator do you think will be best placed to deploy them in its fleets? No prizes for guessing — Lyft.
The company is already working on plans to use the generous funding it has received to develop the “Autonomous On-Demand Network” to use for picking up passengers with GM’s self-driving vehicles.
Both the companies have also embarked upon a possibly unique rental model where GM will provide temporary cars for Lyft drivers looking to make cash but unwilling or unable to spend on purchasing a car of their own. The partnership will allow them to exploit another vertical while keeping every detail within the family.
The said drivers also get access to GM’s OnStar services, which provides emergency, security and navigation services through a connected network.
Lyft is certainly not the only aggregator that is seeing the future of the cabby in AI controlled cars. Uber, one of the market leaders of the space, is already working upon developing its own fleet of cars from scratch. However, not only can Lyft not afford to do so, its partnership with GM may just serve give it an edge over Uber in the long run, as far as technology is involved. However, Uber with its own fleet, will have all the advantages of customization plus complete control, and even from the standpoint of technology — Uber, with operations spanning across almost 70 countries, is no pushover.
Well, both these companies are eyeing the future and seeing it in autonomus cars. The fact that they have adopted widely different methods to adapt to this future, only serves to makes the competition, that much more interesting.