The Next Frontier For GM, Lyft And Self-Driving Cars

Technology continues to take commerce into a growing number of new environments and devices – from clothing and wearables, to smart homes and even retail stores. In 2016, nearly 5.5 million new devices are expected to get connected to the Internet every single day, spurring an enormous Internet of Things (IoT) opportunity.

The number of smart devices is exploding, with some estimates of there being roughly 50 billion IoT devices in the market by 2020, according to research gathered in this month’s PYMNTS IoT Tracker^TM, sponsored by Intel. With the power of connectivity, IoT has the potential to bring payments to places and things where it was once impossible.

Enabling a consumer to turn almost any accessory or item into a commerce device, the true result of marrying IoT and payments, is an opportunity that innovators both inside and outside the payments industry are beginning to seize more than ever before. Fifty billion points of commerce – that’s the availability to expand commerce to places and devices that we can’t even as yet imagine. The only question that remains is where to go next.

Automakers are now stepping up to the plate and making connected car commerce innovation a reality.

SAP’s newly launched Vehicles Network leverages the cloud and connected commerce to allow drivers to find not only the closest gas station, but also the closest one with the cheapest gas. Things get even easier when a driver pulls up to the gap pump, which is activated by data shared via the cloud and allows the mobile payment process of fueling up to happen seamlessly. Payment is completed via the Samsung Pay app, as well as other partners, including FIS, ZipLine and P97.

“It’s the ability for mobile payments to now transform the whole consumer experience,” P97 President and CEO Don Frieden told MPD CEO Karen Webster during a recent conversation. “Anything from the loyalty aspects to a frictionless payment almost to the point that the payment becomes invisible.”

Ford is looking to integrate its SYNC Connect technology, which is currently available in nearly 15 million vehicles, with the Amazon’s cloud-based voice service, Alexa. This would enable customers to access their vehicle from inside their home using Amazon’s IoT, consumer-connected device Amazon Echo, which opens the door to requesting assistance with various functions of their car, from locking/unlocking the car to starting it up.

This year’s Consumer Electronics Show is filled with the usual cadre of state-of-the-art smartphones and laptops, with a few stunners thrown in like virtual reality headsets or bendable touchscreens. Despite all the handheld technological wonders on display, there’s one familiar piece of tech of that, when the smoke finally settles, could run away with the headlines from CES 2016: the car.

Two days before CES kicked off in Las Vegas, GM and Lyft announced that the former had made a $500 million investment into the latter’s development of “an integrated network of on-demand autonomous vehicles.” While the shiny dollar amount might draw most of the attention, lost in the company’s press release is the detail that GM now joins Lyft’s board of directors as a controlling party. That puts more weight behind GM President Dan Ammann’s words when he comments on where the car maker and the on-demand ridehailing service might be heading in the coming months and years.

“We see the future of personal mobility as connected, seamless and autonomous,” Ammann said in a statement. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”

While the deal might make sense at face value — GM and Lyft are both in the business of cars, after all — the automobile maker needs people to buy cars, not just ride in them. In fact, a stronger and wider reaching ride-sharing economy means that fewer consumers need their own means of transportation and fewer dollars flow to Detroit. So why in the world would GM seed money to a company that poses one of the larger threats to the viability of its long-term business model?

The answer might lie around the rest of Motor City. CES attracted just about every major American car industry executive, and Ford CEO Mark Fields made his own intriguing remarks during a Tuesday (Jan. 5) press conference in which he revealed Ford would be tripling the number of self-driving test vehicles it has on the road.

“Beginning this year, you’re going to see us change pretty dramatically, becoming an auto and a mobility company,” Fields said, according to The Seattle Times.

A mobility company — if this kind of word salad sounds right at home in Silicon Valley, it’s not unfair comparison. Auto-maker executives have been quick to adopt forward-thinking tech mindsets as companies like Uber and Google continue to push the boundaries of how to further serve riders’ preferences with autonomous vehicles. And therein lies the rub of GM’s $500 million dowry to Lyft as it assumes a directorial position on its board – GM might not be able to make any money off getting people rides in Lyft’s self-driving cars, but by learning how Lyft works, they can apply those lessons to their own evolving strategies for the future to remain as flexible and current as the startups they seek to emulate.

It’s not all smooth sailing, though. As much as car makers risk in failing to adapt, they risk just as much working with tech companies on self-driving car networks. Mark Boyadjis, an analyst at IHS Automotive, told Bloomberg Business that car company CEOs like Ford’s Fields and GM’s Ammann have a precarious mission ahead of them: to learn as much as they can from companies like Uber and Lyft before they become so ubiquitous with consumers as to supplant their long-held status in the market.

“There are reasons to work with Google and also reasons to want to keep them out of the mix,” Boyadjis told Bloomberg. “If the automakers aren’t careful, customers won’t be having a Lexus experience. They’ll be having a Google experience.”