General Motors Invests In Uber Rival, Lyft

General Motors has invested $500 million to boost the growth of Lyft.

General Motors has challenged Uber. The American automaker would invest $500m in the app-based ride sharing company, Lyft, giving a valuation of $5.5bn the taxi service provider and a major push in the international war against Uber.

The investment is part of a $1bn fund raising round for the Californian corporation, which is the largest measure by a vehicle manufacturer up till now as far as efforts to grab the expansion of the cab industry.

Lyft and GM said they would collaborate to establish a network of driverless vehicles that could be called up by riders on demand, a future vision shared by those who are like Alphabet and CEO of Uber, Travis Kalanick. The biggest carmaker of America will offer short-term rent to drivers of Lyft automobiles through a variety of hubs in the cities of US, the company stated in different statements on Monday.

President of GM Dan Ammann, who is a director of the board of Lyft as part of the agreement, hopes the automobile manufacturing industry to "change more in the next five years than it has in the last 50 and we obviously want to make sure we're at the forefront of that change." 

Dan referred to the invested funds as an "alliance" with the ride hailing company. Instead of remaining neutral in the war between the two transporters, GM made an investment due to "level of integration and cooperation that will be required, particularly for the longer term nature of this," he said in a phone call interview.

Travis, whose corporation has invested heavily in driverless vehicles, has stated that it can take 5 to 15 years before such automobiles are reasonably used across the country. The carmaker is ready to cooperate with the global partners of the ride-sharing enterprise, which include the Chinese taxi service provider Didi Kuaidi, Indian cab company Ola and Southeast Asian taxi company Grab Taxi, Dan stated.

"We certainly see an opportunity to work together through those relationships," Amman stated. "The US is our home market and it continues to be our largest market and we think this is the right place to begin the journey." The collaboration is a setback for Uber technologies, which has battled to overwhelm Lyft, its only significant American rival.

Sidecar, another US rival announced that it would be shutting its network. Uber has been able to raise more $10bn in fundraising and is investing heavily to expand. Its most recent round of fundraising was able to value it at $62.5bn.