Report: Lyft Rejects Acquisition Bid by General Motors

General Motors is a minority shareholder of Lyft the riding hailing company but has expressed its interest in acquiring the company. However, that was rejected by Lyft, says a report by an online information site.

The acquisition bid by GM suggests that the carmaker hopes to foray further into the sector of ridehailing and combine the carpooling business of Lyft with the autonomous vehicles concept.

During an era when it has become far easier for commuters to hail their ride as well as carpool, makers of cars such as GM have struggled to come up with an alternative to car ownership and car sharing.

However, GM found something when it partnered with Lyft and the success it has had could be what pushed it to make the acquisition offer.

GM this past January invested $500 million in Lyft in exchange for a 9% stake. However, the Detroit carmaker looks to be gearing up with more plans for Lyft, but the ride hailing service might not be that impressed.

According to people familiar with this matter, GM was rebuffed by Lyft after it solicited other possible buyers.

The ridesharing company, which is worth at this moment $5.5 billion will opt instead for another round of fund raising instead of selling.

Lyft needs more capital in order for it to compete with its rival Uber, the leader in the industry that is gaining more ground across the globe.

Uber recently sold its operation in China to Didi Chuxing an Asian rival. The ridehailing company based in the U.S. was losing a reported $1 billion annually, as it could not dominate the ridehailing market in China

The company said it would use its money from its sale of Uber China to continue tapping into other markets around the world like Europe and other areas within Asia, while increasing presence in the United States.

The future of Lyft is also being questioned by observers of the industry, especially after it hired Qatalyst Partners, a Silicon Valley investment firm.

The company will either handle a round of funding for Lyft or plan the sale of the company.

As partners, Lyft and GM achieved relatively good success in their first projects. The companies vehicle rental program Express Drive, for instance, gives drivers from Lyft the ability to get leases that are short term on GM vehicles.

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