GM Just Bet Half a Billion Dollars on Building Self-Driving Cars With Lyft

Illustration for article titled GM Just Bet Half a Billion Dollars on Building Self-Driving Cars With Lyft

Detroit is more than a little worried about the tech-centric future of automobiles, namely the ones that drive themselves. So it’s no surprise that GM is investing $500 million in Lyft to build a network of autonomous cars. Why not just buy the whole company?!


Well, that’s not a crazy idea. GM’s massive new investment in the pink mustache crew shows not only an attempt to get into the car service business but also to find a partner in Silicon Valley that will help them keep up with the rumored collaboration between Ford and Google. (Google is also a major investor in Uber, Lyft’s biggest competitor.) Lyft couldn’t sound more thrilled about about the challenge of reinventing mobility with a blue chip company at its back—and on its board since a GM rep will now take a seat there.

“We’ll create the operating system of the future where people will be able to order an experience,” Lyft co-founder John Zimmer told BuzzFeed. “If, you know, you’re heading with your family to Tahoe, you’ll get to order a specific kind of autonomous experience where you get to enjoy movies on your trip or after work you can get a sports Lyft and watch a Clippers game with friends. Now that we have this partnership we can create these sort of experiences with this network.”

That sounds pretty futuristic! It would also be cool to have a party Lyft playing Interstella 5555 to take you to the club and then a time-for-bed Lyft with Enya music videos to get you home safely But how are you going to make friends with the driver if there isn’t one?

[GM, BuzzFeed]

Image via GM

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Why not just buy the whole company?!

Because developing autonomous driving tech for a company and owning a company are completely different things.

With this deal, they invest $500m in R&D for them, and should Lyft go under they can write the investment off as a loss but keep the tech they develop. If they bought Lyft, they would spend $500m to own Lyft, still need to spend another $500m to develop the tech, and only be able to write off the first $500m if Lyft goes under, leaving them $500m in the hole.

What you’re saying is the equivalent of saying “I want to own a McDonalds so I can have all the Big Macs I could ever want for free!”.