Lyft has announced it is setting up its own unit to build autonomous vehicle software and hardware.
“It’s too strategic an area for us to not be a player,” Luc Vincent, the initiative’s head is quoted by Wired.com as saying.
Its report says that, until now, Lyft’s strategy seemed to hinge on working car companies and companies like Google’s driverless subsidiary Waymo, but that now this new strategy suggests that the business model is far from settled.
“Lyft is entering the self-driving race an underdog’s underdog,” the report says. “Waymo has been testing self-driving vehicles in the [San Francisco] Bay Area since 2010, collecting more than 3 million miles’ worth of data on public roads and the vehicles that traverse them. Arch-rival Uber poached top-notch robotics talent from Carnegie Mellon University to create its self-driving unit back in 2015.”
The report also suggests that it is a big risk for a relatively small business like Lyft. “Not only is does General Motors have cash on hand, but its cost of capital is a lot lower than Lyft’s,” it quotes Erik Gordon, who studies tech entrepreneurship at the University of Michigan’s Ross School of Business.