cars news 10: Lyft Refused GM Buyout, Reports Say

According to recent reports from The Information and TechCrunch, General Motors wanted to buy Lyft, but the ride-sharing company declined the offer. Instead, Lyft has opted to raise more funding elsewhere.

Lyft and General Motors teamed up earlier this year with the goal of creating a network of on-demand driverless vehicles across the U.S. As part of the deal, GM vowed to invest $500 million in Lyft, and GM president Dan Ammann took a seat on the young company’s board of directors. GM currently owns a small stake in Lyft.

Some say Lyft may have passed up a big opportunity, given that the company is facing tough competition from Uber, which has enjoyed a bigger market share in the U.S. But a new report from Forbes sheds light on the situation.

“It’s very difficult for small entrepreneurial companies, start-ups and the like to do business with a company the mammoth size of GM,” Los Angeles corporate marketing consultant Dennis Keene told the publication. “And for a company the size of GM, it is very difficult for their people to not call the shots on a partnered venture.” The report also points out GM’s oft-troubled history partnering with companies, which could be why GM is tempted to start buying out its allies. GM’s alliances with Suzuki, Isuzu, Fiat, and Fuji Heavy Industries never quite lived up to expectations.

For now, GM and Lyft simply remain partners, but perhaps a merger will happen somewhere down the line. Until then, the two companies are focusing on their Express Drive program, which gives Lyft drivers access to GM cars at subsidized rates. GM and Lyft also plan to test a fleet of autonomous cars on public roads.

Source: Forbes