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Reuters / Rebecca Cook
General Motors president Dan Ammann.
COLLISION COURSE

General Motors can’t beat the Uber economy, so it’s joining instead

By Alison Griswold

It’s becoming clear that General Motors views Uber—and the “sharing” economy more generally—as a very specific threat to its business.

The latest evidence of this comes today (Jan. 21), with the launch of Maven, GM’s own car-sharing service. In Ann Arbor, Michigan, where Maven is rolling out, customers will be able to reserve and rent GM vehicles from 21 different parking spots across the city for as little as $6 an hour. That makes it more akin to Zipcar than Uber. (Unlike Zipcar, there isn’t a membership fee to sign up.) GM says Maven will expand to other major US metro areas later this year.

“GM is at the forefront of redefining the future of personal mobility,” GM President Dan Ammann says in a statement. “We are uniquely positioned to provide the high level of personalized mobility services our customers expect today and in the future.”

Translation: We’re not being left behind by the Uber economy. We’re joining it.

That a reckoning is facing the auto industry isn’t news to GM. Car ownership was down, especially among young adults, even before Uber became a household name. Last month, GM also saw its market cap eclipsed by Uber’s latest valuation of $62.5 billion.

When Uber first launched five years ago, it might have been tough to see a taxi alternative ever seriously challenging a corporate centenarian like GM. But Uber has long since redefined its target customer from “anyone who takes a taxi” to “anyone who owns a car.” The company’s new mission, as Uber CEO Travis Kalanick told the Wall Street Journal in June 2014, is to, “basically, make car ownership a thing of the past.”

Maven isn’t the only sign that GM is embracing the on-demand movement. Earlier this month, the company invested $500 million in Lyft and said it would partner with the Uber competitor on developing a fleet of self-driving cars. Then, this week, GM purchased the remains of Sidecar, a ride-hailing operation that shut down at the end of December, for an undisclosed price.

The biggest asset GM got with the Sidecar deal was a license to a 2002 Sidecar patent, “System and method for determining an efficient transportation route.” The patent details how to use smartphones to coordinate on-demand transportation—aka, the backbone of any Uber-like platform. It’s been cited in well over 100 subsequent patent applications from companies including Apple, Google, and Uber. GM is also hiring about 20 former Sidecar employees, including Jahan Khanna, the company’s co-founder and chief technology officer.

It’s too early to say what GM will do with all these bits and pieces. Something about ride-hailing, something about car-sharing, something about self-driving vehicles. Perhaps GM will try to sue Uber and Lyft for patent violation (a path Sidecar co-cofounder and CEO Sunil Paul had so far opted against).

Regardless, the point is that GM is increasingly positioned to take on Uber and the broader on-demand economy. Where Sidecar was innovative but cash-strapped, GM has money and resources. Where Lyft had no investments in driverless-car technology, GM has been working on autonomous vehicles for a decade.

GM may be late to the Uber economy, but it’s quickly positioning itself to play catch up.