Penn Wealth Publishing

2016.01.10 Journal of Wealth & Success Vol 4 Issue 1.1

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12 wealth & success volume 4 issue 1 January 10, 2016 wealth & success Copyright 2016. All Rights Reserved. investment intelligence GM's ambitious autonomous vehicle plan When it came to light that General Motors was investing half-a-billion dollars in Uber compet- itor Lyft, Inc., it seemed odd at first. After all, these companies are revolutionizing the trans- portation industry by convincing consumers not just to forget about taxis, but to re-think car ownership in the first place. It seems logical to many Americans who live in an urban area— with an average wait time of just four minutes and a price of just over $1 per mile, why not leave the driving to someone else? GM's massive investment wasn't just a simple case of "if you can't beat 'em, join 'em," however. It goes deeper than that. It seems as though the stodgy old auto company that was in need of a taxpayer-bailout just seven years ago now wants to take a leadership role in the future of personal travel—the autonomous car. And, beginning Auto giant invests $500M in Lyft; nascent stage of self- driving car push GM added to PGLC Despite our misgivings surrounding the bail- out, Mary Barra has done an exceptional job at reinventing General Motors. On 04 Jan we took our profits on Kimberly Clark KMB and replaced it with GM in the Global Leaders Club. We opened the position at $37.07 per share. GM has a 4.23% dividend yield. with this $500 million investment, it is putting its money where its mouth is. So why Lyft, and how does the $2.5 billion startup fit into GM's plans? If you listen to CEO Mary Barra talk about the future, you begin to visualize a scenario she has dancing around in her mind. Picture a young urbanite getting ready to go out for a night on the town with friends. She makes a few taps on her smartphone, and four minutes later her ride is waiting in front of the building. She doesn't think twice about the absence of a human driver as she steps into the car; her only focus is on meeting her friends at the nightclub, and how she can drink as much as she desires, knowing that another autonomous Lyft vehicle will always be just around the corner. While the press has been focusing on industry gasbags, like Google and its gumdrop-shaped monstrosity, GM has been quietly working on putting real technology in road-ready vehicles. The first autonomous features will roll out, in fact, in several of the company's 2017 Cadillac mod- els. With "Super Cruise," for example, drivers will have the ability to switch between hands-on and semi-automated modes. These autos will have vehicle-to-vehicle (V2V) communications capa- bilities to talk with other cars on the road, greatly reducing the level of risk on the highways. Of course, it will take time to overcome the technological, legislative, and consumer barriers, but GM has already embraced the concept. With respect to Lyft, the company's first step will be to set up rental hubs around the coun- try where drivers can rent vehicles by the day, week, or month. Lyft executives claim that thousands of would-be drivers must be turned away because their own cars do not pass the stringent standards set by the ride-sharing firm. This partnership will allow access to new GM vehicles at reduced rates. Drivers would also be able to use the vehicles for their own personal use. GM is not the only party taking notice of Uber's smaller cousin. Within the past few months the company has received funding from the likes of Carl Icahn, Saudi's Prince Al-Waleed, and Alibaba. Certainly, the com- pany still pales in comparison to Uber's size and strength, but its new $53 billion partner may help change the landscape dramatically.

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