Lyft gets a high lift from GM worth $500 Million
Bengaluru, India | Red Newswire | Jan 6, 2015 Last Updated at 11:50 AM IST.
General Motors Co. is backing the cab aggregator startup Lyft Inc. to combat Uber. The company is investing $500 million in the startup which will give it a valuation of $5.5 billion and Uber a tough competition.
This is the largest investment made by an automaker in the ride-hailing industry. GM and Lyft are looking forward to work together towards developing self-driving cars that can be called by the riders on demand. This is similar to the vision of Google and Uber.
Further, the Lyft drivers will be provided with vehicles on short-term rent by GM via various hubs. Dan Ammann, the GM president will be joining Lyft’s board. He said he expects the industry to “change more in the next five years than it has in the last 50 and we obviously want to make sure we’re at the forefront of that change.”
Ammann says this is more of an “alliance” wih Lyft rather than just an investment. Kalanick of Uber says it would take another 5-15 years to get self-driving cars on roads. The company has been seriously investing in self-driving cars project.
GM is looking forward to work with Lyft’s existing internation partners including Ola in India, GrabTaxi in Southeast Asia and Didi Kuaidi in China.
“We certainly see an opportunity to work together through those relationships. The U.S. is our home market and it continues to be our largest market and we think this is the right place to begin the journey,” Ammann said.
This relationship is sure to come as a blow for Uber, since it has been fighting Lyft aggressively. Its another American rival Sidecar had already announced its shutdown.
Uber has raised $10 billion till date and continues to expand aggressively on growth. The company is presently valued at $62.5 billion.
The latest financing round of Lyft has doubled its total financing.