Uber, GM Team Up on Car-Sharing

By Eric Newcomer and David Welch | November 4, 2016

Uber Technologies Inc. is working with General Motors Co., a major backer of ride-hailing rival Lyft Inc., to help drivers get access to vehicles. The automaker’s Maven car-sharing service will let Uber drivers lease cars from GM’s fleet in San Francisco.

GM’s Maven unit will test the program with Uber in the startup’s hometown for 90 days. GM is interested in expanding the business with Uber after that period, said Annalisa Esposito Bluhm, a spokeswoman for the automaker.

After the Detroit car company introduced Maven early this year, it signed a partnership with Lyft to provide short-term rentals to those who pick up passengers through the app. GM initially picked Lyft, in part, because Uber had little interest in working with a major carmaker, said a person familiar with the matter. As Uber began to grow fast, raise capital from Toyota Motor Corp. and sell its China business for a stake in ride-hailing giant Didi Chuxing, GM started to look at hedging its bets, said the person, who asked not to be identified because the conversations were private.

“Lyft would prefer GM didn’t do this because it’s going to make it easier for Uber to expand,” said Evan Rawley, a professor at Columbia University’s business school. “GM has got to think about their main business, which is selling cars.”

GM will continue renting cars to Lyft drivers in San Francisco and a half-dozen other cities, Bluhm said. The companies are also working together on experiments with self-driving cars. “Our investment in Lyft is about autonomous driving,” Bluhm said. “The fact that we have attracted both Lyft and Uber is a strong sign for Maven.”

Lyft’s rental program, called Express Drive, also works with Hertz Global Holdings Inc. “Similar to how we work with Hertz and Maven on Express Drive, it’s expected that vehicle access programs have multiple partners,” Sheila Bryson, a spokeswoman for Lyft, wrote in an e-mail.

Uber and Lyft use auto rentals and financing to attract and retain drivers, a key component of the fight between the two companies. They appeal to people without cars who want to earn money through the apps. The programs are expanding quickly, but critics have said they take advantage of people with bad credit.

In January, GM said it invested $500 million in Lyft, and Dan Ammann, the automaker’s president, joined the startup’s board. The companies later held informal discussions about an acquisition, Bloomberg reported in August. The talks didn’t produce a deal, and Lyft co-founder John Zimmer has said his company isn’t for sale.

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