General Motors will partner with Lyft, the nation’s second-largest ride-sharing service, to let drivers rent one of its vehicles at a relatively low price.
The program will begin in Chicago later this month and initially will focus on Chevrolet Equinox SUVs. But GM is also expected to use Lyft as a way to get the new Chevy Bolt battery-electric vehicle onto the street when it goes into production later this year.
The new program comes just months after the Detroit automaker announced it would invest $500 million into Lyft, and GM President Dan Ammann said, “We’re very pleased with how quickly the GM and Lyft team collaborated to create the Express Drive program, which we will be implementing using our Maven mobility infrastructure.”
Maven is another new GM program announced this year. It targets another growing niche for those seeking alternative mobility, competing with established car-sharing programs such as ZipCar and Car2Go.
As part of the Express Drive program, Lyft drivers will be able to rent a vehicle, rather than run up miles on their own car. The price will start at $99 a week, including insurance and maintenance. But for drivers who complete at least 65 rides a week, the weekly fee will be waived.
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The new project could help Lyft draw drivers away from competitors such as Uber, the largest of the ride-sharing services. And it could help attract new drivers who currently want to work for Lyft but don’t have an acceptable vehicle. GM noted there were 60,000 potential drivers who have applied to Lyft who didn’t have a qualified ride.
“We’re making sure everyone who wants to be a Lyft driver can be, by providing ultimate flexibility at incredible rates,” said John Zimmer, Lyft’s president and co-founder, in a statement. “Launching Express Drive is another way we treat drivers better, in addition to Power Driver Bonus, tips and same day payouts.”
At a time of dramatic change in the auto industry, ride-sharing is considered a major growth opportunity. A recent study by the Boston Consulting Group forecast the number of people using these taxi alternatives would increase five-fold within the next half-decade. Automakers like GM, Ford, Daimler AG and BMW have been teaming up with various entrants, as well as with car-sharing services, hoping to find new ways to both sell more vehicles and develop new revenue streams.
Ford CEO Mark Fields has noted that while global sales generate about $3 trillion in annual business, alternative mobility services produce $5.4 billion in revenue. Fields last week announced the creation of the new Ford Mobility Services to target some of those opportunities.
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GM has been investing heavily in car- and ride-sharing and related operations, including the development of autonomous vehicles. It not only invested $500 million in Lyft, but launched Maven and purchased bankrupt San Francisco-based service Sidecar.
In some ways, the Express Drive program resembles what GM – and other automakers – has done for yours through more traditional rent-a-car services. The industry has long seen daily rental fleets as a way to keep factories running smoothly while also exposing potential customers to new models.
Pam Fletcher, the head of electrified vehicle operations at GM, told TheDetroitBureau.com in January that the maker will use Lyft as a way to get potential buyers familiar with the new Bolt, a 200-mile electric vehicle that is expected to cost around $30,000 after federal tax credits. GM has not yet said when the Bolt will be added to the Express Drive program, however.
“Assuming the financial structure pans out for GM and Lyft drivers (Express Drive is) basically a win-win-win ride-sharing system,” said Karl Brauer, industry analyst with Kelley Blue Book.
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Lyft currently operates in around 200 U.S. cities, about half as many as segment giant Uber.