If Dan Ammann is right, you'd better buckle your seat belt.
The president of General Motors said Monday that he expects the automotive industry to "change more in the next five years than it has in the last 50." And, he added, "we obviously want to make sure we're at the forefront of that change."
It's a big bet by the United States's top automaker. And a stunningly expensive one: Amman's prediction came as GM invested $500 million in Lyft as part of a $1 billion funding round announced by the San Francisco-based ride-hailing company Monday.
As automakers like Ford, Tesla and Toyota and tech firms like Alphabet and Apple scramble to create autonomous cars that require no driver, the older companies are eagerly looking to bolster their tech capabilities. For Ford, this means a partnership with Google. For a consortium of German automakers, it means snapping up Nokia's mapping assets in August.
For GM, the partnership with Lyft (which lands Ammann a seat on the startup's board of directors) seeks to accomplish much the same thing: tapping some Silicon Valley know-how to make sure it doesn't miss out on the future. The partnership will also deliver a more tangible short-term benefit: GM says it will offer vehicles to Lyft drivers for short-term rent through various hubs in U.S. cities.
Perhaps the vehicle rental plan is simply a way to strengthen the "alliance" of GM and Lyft, as Ammann called it Monday to press. But there's another way of looking at it.
Consider the path to a future where our roads are filled with self-driving cars. Experts predict that's about 15 years out. Ammann still sees lots of change in the next five years, largely in cities, where young people are not buying, or even leasing, cars the way they used to. Before human-driven cars go extinct, however, they may enjoy a brief heyday as individuals and families take advantage of the less-expensive on-demand economy. GM wants a piece not just of the distant future, filled with self-driving cars. It also wants to be relevant in this next decade -- and it's taking the very first step in a more flexible approach to getting cars on the road. It's hedging its old business and stepping away from the old dealership model by getting cars directly to for-hire drivers.
This is GM saying: We're trying something new. It is picking a team in the ride-hailing ecosystem, and it is picking a partner for the long-term. Ammann told Bloomberg Businessweek the company decided not to stay neutral as Uber and Lyft duke it out due to the "level of integration and cooperation that will be required, particularly for the longer term nature of this."
What's Lyft getting out of it, aside from a massive amount of capital? It is doubling down on its growth in the United States, as Uber forces funds into expansion around the globe, particularly in competition-heavy China and India.
The funding round, which values Lyft at approximately $5.5 billion, had been in the works for some time. Lyft, constantly the underdog to Uber in the race to overhaul the ride-hailing space, has been in its financial shadow since Uber recently filed to raise another $2.1 billion round of funding at a $62.5 billion valuation -- putting it at 12 times the size of Lyft.
That vast fundraising-and-valuation chasm is one thing. But Lyft does have one thing Uber doesn't, now: An actual automaker on its side in the race to create a self-driving car.