The network of driverless cars would operate automatically and be available on demand to customers

Lyft to introduce on-demand driverless cars

General Motors (GM) has announced it will invest $500m in Uber rival Lyft in order to develop an on-demand network of self-driving cars.

The two companies said the partnership was based on the shared view that self-driving cars will first reach consumers as part of a ride-sharing service, rather than vehicles owned by drivers.

The service will utilise GM's work on driverless cars with Lyft's software platform that matches drivers and passengers and calculates routes.

They hope to create a network of cars that would operate automatically and are available on demand.

Although no timeline has currently been set out for when the new service will become a reality, Lyft drivers will be immediately offered short-term rentals of GM cars as part of the deal.

"We think our business and personal mobility will change more in the next five years than the last 50," GM President Dan Ammann said.

Ammann, who is set to join Lyft's board as part of the deal, said both companies had a "really common view of the future."

Lyft President John Zimmer said the "culture and vision are very alike" in both GM and Lyft.

The massive investment by GM accounts for half of Lyft's latest $1bn (£680m) fundraising round and is one of GM's biggest investments in another company to date.

Major car manufacturers are currently trying to prevent Silicon Valley from dominating the future of self-driving cars and ride-sharing.

Toyota and Ford have recently announced that they will adopt software to link smartphone apps to vehicle dashboard screens.

They have also invited rival car companies to join them in countering the push by Apple, Google, Tesla and others into self-driving cars, or what the industry calls autonomous vehicles.

However, in December, a report from Yahoo Autos claimed that Google was to enter into a partnership with Ford to construct its self-driving vehicles.

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