General Motor’s $500 Million Investment in Lyft: a Reminder to State Legislatures to Quickly Act to Resolve Legal Issues Surrounding Self-Driving Cars

Emily Harrison, MJLST Editor-in-Chief

On January 4, 2016, General Motors’ (G.M.) invested $500 million in Lyft, a privately held ridesharing service. G.M. also pledged to collaborate with Lyft in order to create a readily accessible network of self-driving cars. According to the New York Times, G.M.’s investment represents the “single largest direct investment by an auto manufacturer into a ride-hailing company in the United States . . . .” So why exactly did General Motors, one of the world’s largest automakers, contribute such a significant amount of capital to a business that could eventually cause a decrease in the number of cars on the road?

The short answer is that G.M. views its investment in Lyft as a way to situate itself in a competitive position in the changing transportation industry. As John Zimmer, president of Lyft, said in an interview, the future of cars will not be based on individual ownership: “We strongly believe that autonomous vehicle go-to-market strategy is through a network, not through individual car ownership.” In addition, this partnership will allow G.M. to augment its current profits. The president of G.M., Daniel Ammann, explained that G.M.’s ‘core profit’ predominately comes from cars that are sold outside of the types of urban environments in which Lyft conducts its main operations. Therefore, G.M. can capitalize on its investments by aligning itself at the forefront of this burgeoning automated vehicle industry.

A transition to a network of self-driving cars raises a variety of legal implications, particularly with respect to assigning liability. As Minnesota Journal of Law, Science & Technology Volume 16, Issue 2 author Sarah Aue Palodichuk notes in her article, “Driving into the Digital Age: How SDVs Will Change the Law and its Enforcement,”: “[a]utomated vehicles will eliminate traffic offenses, create traffic offenses, and change the implications of everything from who is driving to how violations are defined.” Underlying all of these changes is the question: who or what is responsible for the operation of self-driving cars? In some states, for example, there must be a human operator who is capable of manual control of the vehicle. As additional states begin to adopt legislation with respect to self-driving cars, it is foreseeable that there will be great debate as to who or what is responsible for purposes of liability. Yet, in the meantime, G.M.’s significant investment in Lyft signals to consumers and state legislators that these issues will need to be resolved quickly, as the automotive industry is moving full-speed ahead.

Be the first to comment on "General Motor’s $500 Million Investment in Lyft: a Reminder to State Legislatures to Quickly Act to Resolve Legal Issues Surrounding Self-Driving Cars"

Leave a comment

Your email address will not be published.




This site uses Akismet to reduce spam. Learn how your comment data is processed.