GM Getting Out of The Car Business?

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We’ll all just hitch rides in the future – in cars that drive themselves: 

SAN FRANCISCO (Bloomberg) — General Motors is following up its $500 million bet on Lyft Inc. with another flashy, though far less costly, move to fortify itself against the rise of Uber Technologies Inc.

The automaker has acquired the technology and most of the assets of the San Francisco-based ride-hailing pioneer Sidecar Technologies Inc. GM is also bringing on board around 20 employees from the Sidecar team, including co-founder and Chief Technology Officer Jahan Khanna. Co-founder and CEO Sunil Paul is not joining GM.

The price of the transaction was not disclosed, although a person familiar with the matter said it was less than the roughly $39 million that Sidecar raised in its failing effort to compete with much better-financed rivals like Uber and Lyft. David Roman, a GM spokesman, said the assets and employees would support the Lyft alliance and other efforts at the automaker.

The deal is another sign that automakers are addressing the potential threat Uber poses to the traditional auto industry. On Jan. 4, GM announced it had invested $500 million in Lyft as part of a $1 billion round that valued the company at $5.5 billion. Daniel Ammann, GM’s president, joined Lyft’s board as part of the deal.

Warning signs

Ford Motor Co. CEO Mark Fields has said his company is working on its own ride-sharing service. In 2014, Daimler AG acquired German ridesharing apps RideScout and mytaxi.

Sidecar helped introduce the concept of peer-to-peer car sharing when it launched in 2012 and essentially allowed anyone who passed a background check to offer rides to smartphone-toting passengers. At the time, Uber was brokering rides only between users of its mobile app and licensed limousine drivers. Lyft entered the scene soon after and the following year, Uber launched its own ride-sharing service, UberX.

Sidecar’s inability to compete in the arena it helped create demonstrates the market power and tenaciousness of Uber, which subsequently raised more than $10 billion in financing and has offered generous monetary incentives for any driver that switched from a competing ride-sharing platform. It was most recently valued at $62.5 billion, making it the world’s most valuable startup.

In early 2015, Sidecar shifted its focus to handling deliveries for other businesses, including Yelp Inc.’s food-delivery service Eat24. But by Dec. 29, Sidecar was finished: Paul wrote in a blog post on Medium that the company would shut down.

“We are the innovation leader in ridesharing despite a significant capital disadvantage, continually rolling out new products that set the bar for others to follow,” Paul wrote. “This is the end of the road for the Sidecar ride and delivery service, but it’s by no means the end of the journey for the company.”

 

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Author of "Automotive Atrocities" and "Road Hogs" (MBI). Currently living amongst the Edentulites in rural SW Virginia.

4 COMMENTS

  1. Just off the top of my bald head, cut out aftermarket parts makers, engine rebuilders and independent mechanics. Oh, and no more non-GM analyzers either. And would they sell you one, just to anybody who wished to buy one? Probably not. So used cars get an even higher price, finally to the tune of leasing a new car regularly or paying through the nose for an older one and of course, states will pass laws and so will the feds outlawing cars of a certain age.

    Of course I could live with a Doge or Ford pickup but they’ll be right behind GM doing this. I see fewer people with cars, a good depopulation technique that Bill Gates is probably front and center behind. Guess I’d best get to building my new horse barn and suing the county to take back the land they use that was once my property.

    Maybe I should start building cattle guards since right of ways through private property will be the next step in avoiding ending up in the clinker for “trespassing” on govt roads.

    This should shorten a great many lives in countries that literally live and die by powered vehicles.

    I get into my truck, blow into a device and it allows or doesn’t allow me to operate it depending on my health, not to mention drugs with all their false positives.

    Sorry everyone, no food in the store, truck drivers are having a problem with their “analyzers”.

    I always liked the idea of having to ride all week to get to my neighbor’s property but as bad as horse riding hurts me now, looks like I’ll be a marker my 30 year old neighbors can pass by…..or they can just use my ashes in their garden.

  2. I don’t know. Maybe they are buying up the company so that they can bury the software and the infrastructure like they did with the streetcars in the 1930s.

    It could cut the other way.

  3. Getting out of the car selling business mostly likely. They could also manage to probably push out the rental car companies to boot too.

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