General Motors is investing $500 million in ride-hailing giant Lyft as both companies team up to develop a “network of on-demand autonomous vehicles.”
The substantial investment announced on Monday will help San Francisco-based Lyft grow its transportation service and is part of a larger $1 billion Series F round it closed today. The company has raised $2 billion since 2013 and is now valued at $5.5 billion, post-money — still a long ways from its main competitor Uber, which is valued at more than $60 billion.
As for GM, this deal is not only about backing Lyft with cash and a seat on the company’s board. The car-maker plans to work with Lyft on a network of driverless cars and will also set up short-term car rental centers in the U.S. for Lyft drivers who need a vehicle.
“We see the future of personal mobility as connected, seamless and autonomous,” GM President Dan Ammann said in a statement. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”
John Zimmer, co-founder of Lyft, added that “together we will build a better future by redefining traditional car ownership.” Having fewer people own cars has always been a long-term goal for Zimmer and his co-founder Logan Green.
The partnership helps both GM and Lyft keep up with other big companies developing their own autonomous driving technology. Uber is already working with researchers at Carnegie Mellon on driverless cars, while Google and Ford are expected to announce a new company focused on autonomous vehicles.
Lyft said today that it completes 7 million rides per month in more than 190 U.S. cities. Other investors in the company’s most recent round include Janus Capital Management and Rakuten, along with Chinese tech giants Didi Kuaidi and Alibaba. Lyft, which has separate deals with companies like Starbucks, also recently inked a global partnership with Didi Kuaidi, GrabTaxi, and Ola.
Uber, meanwhile, operates in hundreds of cities across 67 countries. It has raised more than $10 billion.