General Motors Remodels For Millennials: Investors Should Buy Before Q4 Earnings

In a continuing effort to hedge against the potential negative impact ride-sharing technology could have on new car sales, General Motors (NYSE:GM) has acquired the technology and assets of San Francisco-based Sidecar Technologies. This comes on the heels of its $500 million deal with Lyft, Inc.

As a result, approximately 20 Lyft employees will be joining GM. This includes co-founder and CTO Jahan Khanna; however, co-founder and CEO Sunil Paul will not be making the move to the automaker.

Neither GM nor Sidecar has disclosed the details of the acquisition, although some reports suggest the amount is less than the $39 million Sidecar raised to stay competitive. GM sees the deal as complementary to its Lyft alliance.

What GM Understands About The Future of Driving

The acquisition points to the growing trend with some automakers as they assess the potential impact that ride sharing may have on new car sales. In addition, some analysts have suggested that automakers take the threat of companies such as Alphabet (GOOG, GOOGL), which is working on driverless cars, far more seriously.

GM announced its $500 million investment in Lyft on January 4, and the company’s president, Daniel Ammann, joined the board at Lyft as part of the investment. These moves by GM may be considered a positive sign that the company understands the new technologies must be integrated into its strategies to exploit the opportunities rather than simply mitigate the threats.

SideCar As An Innovator, Predating Uber

Sidecar was an innovator of peer-to-peer car-sharing. The company launched in 2012 by giving individuals the ability to use their private cars to transport riders. Drivers had to pass a background check, but otherwise the smartphone app gave them the technology to pick up passengers and earn an income from doing so. This was ahead of Uber (Private:UBER), which originally arranged rides between passengers and licensed limousine drivers through its app. Lyft entered the marketplace soon thereafter, and Uber developed its own ride-sharing app known as UberX.