GM and Lyft: the changing face of the automobile industry

Lyft, which in January organized an investment round in which General Motors participated with $500 million, has rejected a full buyout offer from the automotive company, a scenario that contributes to delineating the following frontier in the automobile industry: people are buying fewer automobiles, and that transport will no longer be about ownership but about services provided by third parties.

The main players are now taking their positions: Daimler has created Car2go with Europcar, while the taxi app market has been consolidated through the merger of Hailo and MyTaxi, while BMW has launched DriveNow with Sixt, Tesla says its autonomous vehicles will be able to “work for their owner” transporting other people around when their owner does not need them, GM is interested in Lyft at the same time as it launches Maven… it’s clear that this game of musical chairs is speeding up.

It’s becoming clear that the age of the car was a historical mistake the consequences of which we have been paying for too many years now. The idea that each family owns a number of vehicles that are used for about 3% of the time and usually only with one or two people aboard, using a ton of metal that is often no more than a status symbol to move one person, is absurd, and above all unsustainable.

We have to start thinking that owning a car makes no sense and simply costs too much. Redesigning cities for people, getting rid of parking lots and spaces that could be used for other things, and instead opt for efficient transport. The next experiment in eliminating private cars from the city will probably be no less than Manhattan, and is far from being the only one attempting to do so…

General Motors’ move makes sense: Lyft is no threat to Uber, but has valuable experience in the management of these types of services, despite its very limited development in a few US cities, but could still play an interesting role with some investment to boost its capacity. With Uber in the lead, Didi Chuxing out to conquer the world and other companies looking for partners, the idea of taking over a company like Lyft to explore the car-sharing market shows that these types of strategies are anything but testimonial: the automobile companies could opt to take over these companies to try to slow them down, but these seems unlikely when other companies are aggressively taking positions.

After rejecting GM’s offer, Lyft has announced a new financing round, but the trend is clear to see. It is even possible that your car will be the last you own, and that after that you will be a satisfied user of a pool of vehicles that are there when you need them and then disappear when you get where you’re going. And not too far down the road, you won’t even be driving them, they’ll be self-driving.

If the carmakers have cottoned on to this, then there really isn’t much left to say…

(En español, aquí)