A new partnership between General Motors and ride-sharing service Lyft is shaking up the automotive industry as we head into 2016.
GM announced Monday that it is investing $500 million in Lyft to develop a self-driving car system. It’s part of Lyft’s new $1 billion round of funding, which also includes funds from Saudi Arabia’s Kingdom Holding Co., Janus Capital Management LLC and Japanese e-commerce firm Rakuten Inc.
Make no mistake about it, this deal is quite literally a big deal. It marks the largest investment to date that GM has made in another company. What’s more is that it’s also the first time an automaker has invested in a ride-sharing company. The two companies plan to work together on developing autonomous car tech and GM’s investment wins it a seat on Lyft’s board.
In the picture above, GM President Dan Ammann (center) is shown with with Lyft co-founders John Zimmer (right) and Logan Green (left).
“We see the future of personal mobility as connected, seamless and autonomous. With GM and Lyft working together, we believe we can successfully implement this vision more rapidly,” says GM President Dan Ammann.
Lyft, a major competitor of Uber, brings its car-sharing technology to the partnership. GM brings its autonomous driving research to the table, plus other driving tech like its OnStar system. That means as a bonus of the deal, Lyft drivers will get to tap into GM’s OnStar services.
“Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives. Together we will build a better future by redefining traditional car ownership,” says Lyft President and Co-Founder John Zimmer.
The new partnership impacts rental cars, too. In the coming months, GM and Lyft say they plan to build rental-car centers where Lyft drivers can rent vehicles at discounted rates.
While it’s the first deal between an automaker and a ride-sharing company, it’s not the first deal between an auto exec and one.
According to the Wall Street Journal, Ford Motor Co. Executive Chairman Bill Ford invested in an earlier funding round for Lyft, but that was through his venture firm, Michigan-based Fontinalis Partners LLC, and not associated with the automaker.