For those readers who live outside the US or are not ride-share users, Lyft is a direct competitor to Uber although they are quietly getting on with their business unlike the competition who get all the (mostly negative) media exposure.
General Motors, like the other car manufacturers, are having to look at the whole market and try and figure out the future which as you may know is splitting into several evolutionary branches with varying stages of automation. Funnily enough General Motors – the old one, not the current entity – has had an interesting history with transportation. In their distant history they bought up many bus companies and then closed them down forcing people into cars.
Remember though that the old General Motors died in 2008 during the Global Financial Crisis when they re-organised into a new company with Government assistance. This new company is far more aware of the perils of failure – and the need for great revenue streams.
One thing that Lyft has done is keep it’s nose clean and it built a great valuation – something that came good. In 2015, Lyft was looking for some big investment and General Motors saw some great potential for the future so in early 2016, they put $500M into the business as part of a bigger strategy that included Cruise Automation to create a network of autonomous ride-sharing vehicles. The plan for GM was to merge the software from the cars and the Lyft app into a base for a seamless eco-system. They could see future revenue streams with minimal overheads.
For General Motors, there was another upside: Toyota and Ford agreed to use the same link software between cars and smartphones and Lyft also gained more dollars from a Saudi Prince, Didi Kuaidi and Alibaba.
In a report last October, it was clear that Alphabet, Google’s owner, was also sniffing around Lyft. Alphabet also own Waymo who are partnering with Lyft in some States. Waymo and Uber have had their battles that have now been sorted out with a large bag of cash coming Waymo’s way. Reports also surfaced that GM’s Cruise Automation was working with Uber!
There was another report that Cruise Automation had been tasked by their owner to go head-to-head with Uber, Lyft and all the other competitors. I suspect that every partner/investor in all the ride-sharing and autonomous vehicle technology companies have sentries all over the fort with telescopes pointed at the horizon. It’s the wild west out there – literally (being California!) and it is clear that there is a lot of hedging of bets. They are all waiting for the inevitable attack.
There is definitely a shotgun strategy at play for most major players in the market. Google is developing autonomous cars whilst their parent, Alphabet, is sinking money into Lyft who were supposed to be getting GM’s autonomous kit. Lyft has signed deals with Ford and Jaguar Land Rover for vehicles when in theory they should be using the GM fleet. Waymo is working with GM, yet their own team is also going head-to-head with everyone else! Where does this end and are there any conflicts of interest here?
This is going to be a really interesting few years as we see money sloshing around this market and the big players scrapping furiously to grab a market that may not actually deliver. I wonder what will happen when people come to choose a new car, will they still want to drive, will they buy an autonomous vehicle or will they think why bother, let’s just ride-share. Demographics are changing and so are the buying needs. Sales of autonomous vehicles may not be the huge revenue stream that everyone thinks, certainly those at General Motors.
Autonomous cars are exciting today because they are still a little bit sci-fi however how many people will actually get in an autonomous ride-share vehicle with loads of human controlled cars all around them? And you know that there will be some drivers who will see it as sport to frighten the bejesus out of the occupants!