Automotive Blogs

Stopping GM's Mobility Madness

by User Not Found | Sep 11, 2020

Four and a half years ago General Motors sank $500M into ride hailing service provider Lyft. At the time, the investment looked like a hedge against the success of mobility service providers but it was odd given that Lyft was the number two player in a market dominated by Uber and the company lacked a global presence.

Even more curious was the fact that the average GM dealer in the U.S. was using Uber for customer pickups and drop-offs and there was no wider collaboration seen with the Lyft brand. With the onset of GM’s Maven car sharing service and related Gig program, Lyft drivers were able to get access to Chevy Bolts – but Maven and Gig were terminated in April in the midst of the pandemic.

Lyft went public last year, and it was thought at the time that GM might cash out and pocket $1B – having doubled its investment – but that didn’t happen. It’s unclear how many shares in Lyft GM currently owns or what the value of those shares may be.

What is clear is that GM’s original plan for Lyft – to act as the front end for a Cruise Automation (another GM investment) based autonomous ride sharing network – had failed. Early on, after acquiring Cruise, CEO Kyle Vogt let GM know that he would not partner with Lyft.

This rejection likely contributed to the departures of both Julia Stein, original CEO of Maven, and Dhivya Suryadevara (GM CFO) who, together, were unable to steer GM toward a coherent mobility strategy. When a marriage of Lyft and Cruise could not be achieved, it appears that GM lost interest in Lyft and is now more or less stuck with its investment and no strategy.

The latest contradiction in GM mobility strategy is the company’s decision to offer “special pricing” for Uber drivers on the 2020 Bolt EV. Why GM is offering special pricing to Uber drivers and not Lyft drivers is a mind boggling proposition to ponder. But let’s consider what GM really could do to turn around its mobility strategy and rejuvenate the ride hailing sector simultaneously.

Here is my six step program for a recovery of GM’s mobility strategy which will have the collateral impacts of stimulating GM EV sales (and rentals and leases), building value into GM’s OnStar platform, restoring value to GM’s Lyft shares, and driving a path to recovery for the ride hailing sector overall:

1.      Offer special pricing/leasing/rental terms on Bolt EVs to Lyft drivers – This seems like a no-brainer, but GM hasn’t take this step. Everyone loves an underdog. It’s time to give Lyft a lift.

2.      Sign up buyers of GM vehicle to Lyft with generous ride credits – Lyft becomes the go to roadside assistance transportation provider for GM (as is the case currently for BMW), the preferred service loaner car transportation, and the preferred ad hoc transportation option for GM vehicle owners. And, when GM owners use Lyft they earn credits to buy their next GM vehicle.

3.      Add Lyft app to in-vehicle connected car platform – It’s true that only a fraction of GM vehicle buyers will ever drive for Lyft, but why not make it easier by integrating with the in-vehicle app platform – making Lyft an embedded app – a built-in option – including navigation.

4.      Offer in-vehicle partition installations through GM dealers for Lyft drivers – This is a big one. Now that GM is no longer making ventilators and personal protective equipment (PPE), why not commence manufacturing partitions for ride hailing operators to install in their vehicles? There’s a reason demand for ride hailing is down during the pandemic– people are leery of sharing an enclosed space with a stranger. Partitions will help alleviate that fear and restore confidence among ride hailing customers.

5.      Develop deep app integration with Lyft with a program competitive with the Uber Green EV discount program – It isn’t enough for GM to embed the Lyft app in its cars. GM should fully integrate the booking platform or at least open up its APIs such that Lyft drivers using GM electric vehicles will only be assigned passenger fares if they have sufficient range in their on-board batteries. The app could also cleverly route drivers to available charging stations in a timely manner.

6.      Build advanced traffic information and payment platform via OnStar – A Lyft integration opens the door to a transformation of the OnStar brand to deliver and support mobility solutions ultimately ranging from ride hailing to car sharing and future car subscription programs.

The saddest note of all in the midst of GM’s mobility madness is the departure of Maven CEO Julia Steyn. Steyn left to head up U.S. e-scooter operator Bolt, before leaving Bolt to join VectoIQ along with two other former GM executives Steve Girsky and Mary Chan. Unlike Girsky and Chan, Steyn removed General Motors and Maven from her LinkedIn profile. Since when did it become embarrassing to have GM on your CV?

GM has the tools to transform the mobility sector and transform the current relationships between dealers and car companies, between dealers and ride hailing operators, and between ride hailing operators and car makers. Ultimately, GM could disrupt car renting and ownership in ways that Uber and Lyft and Tesla might only dream of. But only clever and rationale strategy with bulletproof execution will deliver enduring value both to GM’s Lyft holdings and to the future value of GM stock.

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