Lyft Rebuffs Takeover Bid By GM

In this Jan. 17, 2013 photo, a Lyft car drives crosses Market Street in San Francisco. Fed up with traditional taxis, city dwellers are tapping their smartphones to hitch rides from strangers using mobile apps that allow riders and drivers to find each other. Internet-enabled ridesharing services such as Lyft, Uber and Sidecar are expanding rapidly in San Francisco, New York and other U.S. cities, billing themselves as a high-tech, low-cost alternative to cabs. (AP Photo/Jeff Chiu)

News is breaking about something which we all expected to happen. GM apparently tried to buy Lyft but was rebuffed by the ride-sharing company even though it has no problem partnering with GM on a potential self-driving fleet.

GM had invested close to $500 million into Lyft early this year to get a foothold into the ridesharing economy. Now, more than ever it looks likely that we are progressing to a world where car ownership might not be the obvious choice it is now.

GM, which is one of the largest car makers in the world needs to make sure that it is present at the cutting edge of technology change in the automotive world otherwise it may find itself to become irrelevant in a short time.

GM seemed to have started late in the race to bring automated cars on the road and to its credit, the company has been trying to make up for lost time through some aggressive acquisitions. It gobbled up Cruise Automation which specializes in aftermarket kits that turn regular cars into self-driving cars.

It is unclear as to what the offer was from GM that Lyft turned down but the fact that it was a takeover target is not a surprise. Lyft has been suffering losses and is still only a fraction of the size of its main rival, Uber.

Other car makers too have been investing in ride-sharing companies, most notably, Daimler recently bought a controlling stake in Hailo, a European ride-sharing company.

Other car-sharing companies could also be looking to acquire Lyft and potentially gain a foothold in the American market. Didi Chuxing, the biggest ride-sharing company in China recently took over Uber’s business in China, marking a big win for the company.

Speculation has been rife that Didi could be looking at Lyft as an acquisition target. Lyft reportedly has $1.4 Billion in the bank to play with and is planning to raise more money in the short term. There is no doubt that the size of the ride-sharing market will continue to grow and will gain exponential traction once ‘true self-driving’ cars make it onto the roads.

Lyft might get a better valuation for itself or be able to make a solid business of its operations by that time. Will its investors have that much patience though is the question that remains to be answered.

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