The automaker is planning entering the car-hailing market to face the problem of traffic congestion and making commuting easier.
As reported by Bloomberg, General Motors will be acquiring a San-Francisco based startup, Sidecar Technologies Inc. through which the company will be able to offer car hailing service. Initially it had also invested over $500 million in a firm called Lyft, in a ride-sharing service. Sidecar Technologies has been unable to compete effectively against Uber and Lyft.
This start up car sharing service provided came into being back in 2012 and was the first in the market to introduce the ride-sharing concept but it failed to survive in the industry with major competitors like Uber and Lyft. Increased rivalry in the car hailing and ride sharing industry let it to put an offer of $39 million on the business, according to Bloomberg. However the details of the deals have not been disclosed by either of the companies as yet.
Last month, Sidecar shut down all of its outlets and moved towards making deliveries to a number of businesses, one of which includes Yelp’s food delivery service. Presently, the market leading in car hailing is Uber with a market valuation of probably more than $62.5 billion. General Motors, on the other hands, is trying its best to reach up to the level of major transportation network. With the current market valuation of Uber, it can absolutely take over and crush the traditional automobile organizations including GM and Ford Motors – as the market cap of these automaker is at $46.25 billion and $48.2 billion.
According to a report by Goldman Sachs and Barclays, automakers are now pointing their focus towards car-riding and hailing services as problems just as traffic congestion can easily be tackled by these services. They believe that these services can be the future of the automobile industry – additionally if autonomous self-driving cars are officially introduced it could make daily commuting quite easy. It is highly likely that the purchase of new cars can decrease by as much as 40% if these services along with self-driving cars are introduced.
Bloomberg stated that the transportation service that will be launched by the automobile giant will be called ‘Maven’. Through this service people will be take a ride from passengers who use the same routes to commute. A trademark for this name was filed back in November 2015.
Subsequently, an announcement by the CEO of Ford Motors has also come forward, according to which it will also be making its entry in the lucrative car sharing market soon – initially the automaker also launched a service by the name of Peer-2-Peer Car Sharing. Similarly another European company Daimler is also running a similar service in various places.