January 5th, 2016

GM and Lyft, also, the US and VW

These are not related, other than that both involve passenger cars.

The US is suing VW.


It is about the emissions defeat device. This is a civil, not a criminal action. It does not name any specific individuals. It seems to be driven by obstreperousness on the part of VW and fixing the problem.

GM made a deal with Lyft, a transportation network company whose share of, er, ride sharing is exceeded only by Uber and, honestly, not by that much.

Not too long ago, Farhad Manjoo wrote this piece for the NYT, advocating that more tech startups multiple phases into private funding should go public. He named Lyft specifically, arguing that they could set the value for Uber, if they went public first. They might also benefit by being the transportation network company which ordinary people could buy.


"Mr. Zimmer of Lyft recently said that the company had captured 40 percent of the ride-hailing business in San Francisco, its oldest market, and 45 percent in Austin, Tex., a newer market."

But they do have some revenue issues. Perhaps by partnering with GM, they can get through a difficult patch more easily.

Here is the GM Lyft deal coverage at NYT:


You will note that the amount GM is investing in Lyft is the entire amount that Manjoo article said that Lyft was looking to raise in this round of funding. You would _think_ that would be the focus of coverage, generating headlines like: GM Buys Entire Next Round of Funding for Lyft (you can sort of imagine puns like "big bite" or "rides for everyone" or whatev).

But wait! While back in the Manjoo article, Uber was looking to raise a billion and Lyft was looking to raise half that, in this new article, Lyft has raised the full round -- but is now calling it _half_ of what it intends to raise in this round.

What a difference a month makes! A half a billion dollars, apparently.

GM's support includes a couple new aspects. One, joint R&D into driverless cars (which caught Emily Badger's eye over at the WaPo: https://www.washingtonpost.com/news/wonk/wp/2016/01/05/the-future-of-driverless-cars-isnt-going-to-look-like-you-think/).

If you are thinking, seriously? Driverless cars are still having trouble with snow, rain and city streets. How is _that_ gonna happen anytime soon? Yeah, I know. I don't get it either, but I suppose we should all be happy that someone is working on it, because when I'm too tremor-y and blind to drive it'd be cool to have a car drive me around without having to rely on some unreliable human to show up and do it. Here's what I noticed:

"G.M. will also work with Lyft to set up a series of short-term car rental hubs across the United States, places where people who do not own cars can pick up a vehicle and drive for Lyft to earn money."

Those poor taxi companies! They are screwed.

A friend of mine in Seattle says that people contemplating getting a new car who think they might also drive for Uber part time to pay for said car generally pick Priuses. "All the Uber drivers drive Prius." If I were GM, I'm sure I'd be happy about VW being taken down a notch by their scandal. But I'd still be worried about Toyota. And if I saw that a large number of car purchases that weren't luxury cars were being motivated in part by people thinking they would drive for a transportation network company, I'd be figuring out a way to get in on that action.

I eagerly await future announcements. Because this particular soap opera is just starting to get good.