GM and Lyft Will Partner to Test Self-Driving Taxis

Back in January, GM announced that it had invested $500 million in ride-sharing provider Lyft (you know, the “generic Uber”) to expedite the rollout of personal mobility services. Today, the Wall Street Journal reported that within the next year, GM and Lyft will partner on a test of self-driving Bolt EVs that Lyft users can hail. Both GM and Lyft declined to comment on the report.

According to an anonymous Lyft executive quoted in the WSJ, the companies have not yet worked out all of the details of the arrangement. However, the concept is that a Lyft user can summon a ride using their app, and can select whether they are open to a self-driving car picking them up, or one driven by the more-traditional human being. The trial will only occur on a limited basis in an undisclosed city before the driverless Lyft is pushed out more broadly.

“Driverless” is a bit of a misnomer, at least in the beginning, because there will be qualified drivers behind the wheel of the cars that are driving themselves taking fares for Lyft, just in case something goes wrong. Eventually, the cars will likely not require a licensed driver sitting behind the wheel.

This arrangement makes sense for both companies. How might Lyft’s cost structure be altered by not having to give drivers a cut of the fare? Probably fairly dramatically. Lyft retains an administrative fee of up to 25% (up to 36.5% in NYC). Without drivers, but adding the cost of paying GM (or not? Maybe it’s part of the GM investment) for each leased Bolt, Lyft could potentially retain a much higher percentage of the fares.

For GM, the deal exposes many more people to its new Bolt during a time when the car may have trouble gaining traction in the marketplace. It’s not the darling that the Tesla Model 3 seems to be (I don’t recall any press releases from GM touting 400,000 pre-orders for the Bolt as Tesla has done with the Model 3.)

Uber, Lyft, and their ilk have significantly disrupted the taxi industry. I’ve ridden Uber and Lyft – and traditional taxis – many times, and it’s hard to beat the cleanliness and pricing of the ride-sharing services vs. the traditional cab. The fact that the Uber/Lyft driver actually tries hard to please their riders is also helpful.

So will removing the human customer-service interface (the driver) improve or degrade the ride-sharing experience? Would you be freaked out if a car pulled up without anyone else in it to give you a ride home from the bar? What if said car just had taken someone else home from the bar and they made a mess in the back seat, while the car itself was oblivious to the problem?

Serious issues to consider.