Why GM Wants To Take Over Lyft And Why Lyft Is Saying No
General Motors apparently wants to buy the 89% of ride hailing/sharing company Lyft it does not already own. And, according to technology site The Information, Lyft turned GM down. Talking to a couple of people with knowledge of the situation, here is what seems to be going on.
General Motors GM +0.89% has made the calculation that ride-hailing services like Lyft and Uber are not a passing fad. Yellow taxis in cities are finally beginning to battle back with app-based services, but business and pleasure travelers alike are increasingly preferring the ride sharing services–it feels smarter, the service tends to be much better and the cars are in far better shape. Moreover, the economy that is building around these services through drivers in cities, as well as suburbs, is taking hold and not going away. It is a true disruption.
GM has a terrible history with alliances. CEO Mary Barra and some of her close advisers well remember the fiasco constructed by former GM chairman-CEO Jack Smith around alliances. GM owned stakes in Suzuki, Isuzu, Fiat and Subaru parent Fuji Heavy Industries , and while those alliances yielded some “small beer” efficiencies in purchasing, engine sharing (Fiat) and model sharing (Suzuki and Isuzu built small cars for Chevrolet , Isuzu built light pickups for GM, Subaru built a small car for Saab), the learning from those experiences, which were all eventually unwound under duress because the they never fulfilled expectations, was that owning is better than aligning.
forbes.com
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