The last time GM invested in companies that competed with private ownership of cars, it didn't go too well... https://en.wikipedia.org/wiki/General_Motors_streetcar_consp...
G.M. Invests $500M in Lyft
121–130 of 402 posts
Re: G.M. Invests $500M in Lyft
#122Earlier quoted context omitted.
GM's financial arm was GMAC, which, while bailed out during the financial crises, eventually rebranded and IPO'ed as Ally Financial. The US Treasury made a ~ $2.4 billion profit on a $17.2 billion investment: https://www.treasury.gov/press-center/press-releases/Pages/j...
>The US Treasury made a ~ $2.4 billion profit on a $17.2 billion investment Factor in the interest USA would have saved by paying down the national debt instead. Additionally, consider what private investors would have returned with the same investment and what they would have paid in tax on personal income if they had never been taxed that $17.2b instead. They won on this one, we can point at the various Solyndras t…
Consider the loss in tax revenue and increased social program expenditure if the industry collapsed and some portion of the ~ 2 million US auto-workers lost their jobs. Consider the effect this could have had on the wider economy, and how that could have affected government finances, not to mention the average citizen.
The US government has always invested in it's industries, either through broadly applicable programs like the patent office, or through more targeted items like specialized laws and grants for specific industries. Cash investment isn't really all that different, except they might actually expect some sort of monetary return on that investment, unlike grants.
Re: G.M. Invests $500M in Lyft
#123Earlier quoted context omitted.
The bailout was massively profitable for the government and every penny has been repaid. Investing in innovation is exactly what a company like GM should be doing and our tax dollars are in no way involved in this. Edit: didn't make money on GM http://www.reuters.com/article/us-autos-gm-treasury-idUSBREA... Made lots of money overall: http://www.nytimes.com/2014/12/20/business/us-signals-end-of...
This is entirely untrue, pertaining GM. We tax payers lost tremendous money on GM[1], and then GM restructured (think "good bank bad bank"[2] style nonsense) in a clever way to ensure that we would never reap the benefits of the future success of "GM". 1. http://www.reuters.com/article/us-autos-gm-treasury-idUSBREA... 2. https://en.wikipedia.org/wiki/Bad_bank
Good point! Very good point - I still think investing in innovation is the only thing that makes sense for GM, the reason the auto bailout worked out is because Ford*, for example, did and is crushing it.
http://www.nytimes.com/2014/12/20/business/us-signals-end-of...
Edit: Ford did not take bailout money so that logically does not hold like I thought it did. Point about innovating still holds fine.
Re: G.M. Invests $500M in Lyft
#124Earlier quoted context omitted.
>The US Treasury made a ~ $2.4 billion profit on a $17.2 billion investment Factor in the interest USA would have saved by paying down the national debt instead. Additionally, consider what private investors would have returned with the same investment and what they would have paid in tax on personal income if they had never been taxed that $17.2b instead. They won on this one, we can point at the various Solyndras t…
>Factor in the interest USA would have saved by paying down the national debt instead. The average interest rate on the debt is 2.43$, we have around $17 trillion debt, and you're talking about a $17 billion paydown (0.1%). The amount of interest saved would be around $400 million per year. The profit on the GM bailout was $2400 million, so it would have taken 6 years for the decreased interest to total 2.4 billion.…
Debt:
6 years to realize the savings on the interest? It nearly took GM that long to repay the debt they took on. It's sounding like a worse investment all the time.
OTJ Experience: I think it's less speculative and lines less wealthy billionaires pockets to invest directly into education and industry beyond private market money to provide great learning experiences for people.
Re: G.M. Invests $500M in Lyft
#125I'm glad we bailed them out so they could wildly speculate on tech startups.
The bailout was massively profitable for the government and every penny has been repaid. Investing in innovation is exactly what a company like GM should be doing and our tax dollars are in no way involved in this. Edit: didn't make money on GM http://www.reuters.com/article/us-autos-gm-treasury-idUSBREA... Made lots of money overall: http://www.nytimes.com/2014/12/20/business/us-signals-end-of...
> The bailout was massively profitable for the government and every penny has been repaid
I don't really have a stance on the GM bailout, but your statement here is missing something important - every company that a government gives billions to will do disproportionately well in their industry in the short term and give solid returns. But the role of taxpayer money isn't to select winners. The free market is supposed to weed out the chaff.
Edit: Want to add a PS - the government might "make profit" on the investment, but structurally the market and society has lost.
Re: G.M. Invests $500M in Lyft
#126Earlier quoted context omitted.
I can't see the opportunity for them, on the other hand I can see the threat, if autonomous cars become ubiquitous then why would you bother owning your own? Also if rental becomes the dominant model then customers aren't going to worry so much about those expensive extras where car manufacturers make their profits.
Even if all cars are self driving, these cars have to come from somewhere. The rental model may in the end provide more profits, because it has built-in repeated charges.
> these cars have to come from somewhere.
yes, but think how much the average car owner uses the non-self-driving car today. The car mostly sits idle in a garage or parking spot, and is used, maybe 75 minutes of each day.
Multiplexing riders into a pool of shared cars is one way to drastically reduce the worldwide fleet of cars. a larger proportion of total cars will be moving at any one time to transport the same number of people, which means you need fewer cars overall. It will be attractive to today's car owners because it reduces costs.
to the extent that self-driving cars enable shared pools of on-demand vehicles, the innovation represents a huge disruption for the auto manufacturers who've built a business model on selling everyone a car.
> The rental model may in the end provide more profits,
Sure there is a business opportunity, but the change is disruptive.
Re: G.M. Invests $500M in Lyft
#127Earlier quoted context omitted.
When that happens you can almost bet that it will be a hypercompetitive market which is likely to eventually be dominated by car manufacturers. I mean why do you need Uber at all when you make the car itself and all of its inside. It's not as if the software to coordinate pickup and drop-offs is rocket science. And neither is customer service. I look forward to how cheap and easy it will be and how the manufacturers…
This is interesting. It's what Christensen's theory of disruption would say, given the time, (lack of) complexity, and the curve of 'good enough.' The only thing could be branding. There is a reason many people buy iPhones, or bottled water in a fancy plastic container for $5/bottle. Would we want Uber because it's "better" than GM, which does not have a huge appeal? Then again, a car is a car is a car, if it is on t…
> Then again, a car is a car is a car,
also, a phone is a phone
an airline is an airline
a shoe is a shoe
....
Clearly consumers have preferences in any of these markets today. Even in cars today. That won't change with CaaS.
Re: G.M. Invests $500M in Lyft
#128Earlier quoted context omitted.
I can't see the opportunity for them, on the other hand I can see the threat, if autonomous cars become ubiquitous then why would you bother owning your own? Also if rental becomes the dominant model then customers aren't going to worry so much about those expensive extras where car manufacturers make their profits.
>autonomous cars become ubiquitous then why would you bother owning your own? Anything requiring a truck (60% of new vehicle sales) will not be something that you use as a automated vehicle that is for rent. You really are ok with ordering up a driverless car that I will take off-road and load up with scrap materials from a house remodel and send off, driverless down the road with my trash hanging out the back? I rea…
Most people aren't hauling scrap, either. And of course there could be autonomous solutions for that. If you don't have to own the truck, you could more easily get some sort of enclosed vehicle (like a box truck or small dump truck) to do the hauling, because your investment is very small (you only need it for a few hours or days).
Re: G.M. Invests $500M in Lyft
#129So Google+Ford, Lyft+GM, Tesla on both sides software/hardware... Where is Uber's Hardware going to come from now? I wonder if this is an instance where the personalities involved with Uber are having a detrimental effect on these sorts of long-term needs. Or is there something yet to be announced?
You know that Google Ventures put $200m+ into Uber right?
So... the answer is Ford, I suppose.
Re: G.M. Invests $500M in Lyft
#130Earlier quoted context omitted.
I can't see the opportunity for them, on the other hand I can see the threat, if autonomous cars become ubiquitous then why would you bother owning your own? Also if rental becomes the dominant model then customers aren't going to worry so much about those expensive extras where car manufacturers make their profits.
>autonomous cars become ubiquitous then why would you bother owning your own? Anything requiring a truck (60% of new vehicle sales) will not be something that you use as a automated vehicle that is for rent. You really are ok with ordering up a driverless car that I will take off-road and load up with scrap materials from a house remodel and send off, driverless down the road with my trash hanging out the back? I rea…
Why would the autonomous vehicle I rent for a commute ever be the same one you use to load up with refuse from your home remodel?
Wouldn't it make way more sense for you to rent (or own) a pickup truck and for me to rent an autonomous passenger vehicle?
Setting autonomous vehicles aside, current short-term car rental companies (i.e Zipcar) have requirements on the condition you return a passenger vehicle in, vs a cargo/hauling vehicle.
I've rented a Zipcar pickup truck to haul a load of concrete pavers, but I wouldn't try to do the same in one of their regular passenger vehicles.
There should be a sufficiently large market for both use cases that there should be limited sharing of vehicles between them.