Ride-sharing service Lyft recently announced that General Motors
General Motors and Lyft appear to be moving forward with added synergy, as all of Lyft's recent initiatives seem to be bolstered by General Motors' existing research and development slate. While neither company offered specifics as to how they hope to develop a self-driving fleet or rental program, it seems clear that Lyft will need new cars for its expansion and that this demand will create a built-in number of sales each year for General Motors, just like Ford's
Additionally, General Motors has been developing self-driving technology since there has been an uptick of young adults refusing to buy cars and instead relying on the increasing amount of ride-share and public transportation options. For Lyft, the addition of self-driving cars to their fleet will bolster its sales tremendously, as 70% of the price of a Lyft ride goes to the driver. So without a driver to pay, Lyft can charge significantly lower fares than its competitors or enjoy a much larger profit margin.
The investment may be a signal towards a larger concern for the automotive industry: ride-sharing. With consumers turning away from owning a car and instead preferring cheaper alternatives, large automotive companies must find ways to adapt and ride the wave created by Lyft and Uber. In General Motor's case, they joined forces with the second-largest ride-sharing company in the hopes to drive up exclusive sales. But these probable sales to Lyft have the added benefit that they require no marketing and customization as General Motors can produce just a few varieties of vehicles to satisfy the needs of Lyft's short-term rental program.
Further bolstering the company's investment in ride-sharing is General Motor's acquisition of the technology and assets of Sidecar, a now-defunct ride-sharing company. While General Motors has remained silent on exactly how it will use Sidecar's existing technology, the recent announcement of General Motors' Maven seems most probably. According to press releases, Maven will "allow owners of General Motors vehicles to give rides to other passengers who are commuting in the same direction." It appears that General Motors is creating its own ride-sharing technology, just like Uber and Lyft, exclusively for its loyal customers.
What these investments mean for ride-sharing regulation and Uber's rumored IPO are unclear. Analysts expect Uber to go public in the next year, but may find value in a partnership with another automotive brand instead, especially as the company is not lacking capital. Additionally, ride-sharing companies have escaped much regulation because of the argument that they are simply a technology company connecting car drivers to passengers, as opposed to a taxi service providing cars. But with Lyft potentially providing self-driving cars to consumers, the ride-sharing world seems to be entering uncharted legal ground.
