GM Dumps $500 Million Into Lyft (nytimes.com)

An anonymous reader writes: General Motors has invested $500 million in ride-sharing service Lyft, and also committed resources to develop an on-demand network of autonomous cars. "GM will also work with Lyft to set up a series of short-term car rental hubs across the United States, places where people who do not own cars can pick up a vehicle and drive for Lyft to earn money." Lyft thinks the future of self-driving cars is in a network of vehicles people share, rather than individual ownership. GM, which produces millions of automobiles every year, seems to agree. The money will help Lyft compete with competitor Uber, which has raised over $10 billion in investments already. "The alliance with GM is surprising because automakers could consider ride-hailing companies like Lyft as long-term threats to auto sales. In an interview, [GM president Daniel Ammann] said that GM wanted to be part of the changing business models in transportation."

Comments

Re:Hedging their bets

[lgw]

I don't think GM really believes it's 'the future' or anything as blue-sky as that, they're just hedging their bets against the possibility of this combination being viable.

They may be hoping it's the future. Perhaps GM, which makes cars no on wants to own, is hoping for a future in which individuals don't make buying decisions, and instead just ride in whatever shows up.

While GM trucks are still popular (GM vs Ford is the redneck version of VI vs EMACS), the cars are mostly popular with rental fleets and government fleets: places where the driver doesn't choose the car (much like Newsweek is only found in waiting rooms). This business model fits perfectly with that idea.

Re:good job

[andymadigan]

"GM chief Mary Barra: 'pattern of incompetence' caused fatal recall delay"

GM was completely incompetent, which is why it went out of business. GM was renamed to Motors Liquidation Company and split into trusts to deal with the long term effects of GM's incompetence. The incompetent, decrepit organization was of course transferred to a new corporation, so that it can fail again in a few years.

The new GM made sure it wouldn't be responsible for the legal consequences of the poor quality vehicles it released prior to 2009, so it can't claim the history of the company that manufactured them either. New GM is a brand new company, with the same failed engineering organization.

Who knows, maybe GM will be the Yahoo! of cars, with its ownership stake in various companies worth more than the core business. In any case, Lyft will hopefully do something more productive with GM's money than GM would have done with it.