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Why General Motors' New Maven Could Be Huge

By John Rosevear - Jan 21, 2016 at 5:02PM

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GM just launched a little car-sharing service, called Maven, in a Midwestern college town. It seems like no big deal. But there are good reasons to think that it's the beginning of a huge shift for General Motors' business.

Get used to hearing about Maven: GM's new car-sharing service could turn out to be the beginning of a big new business that will take on Silicon Valley giants. Image source: General Motors.

General Motors (GM -1.99%) on Thursday announced the creation of a new car-sharing service called Maven, which will be the brand name for the auto giant's mobility services going forward.

What is it?
Right now, it's a car-sharing service operating in Ann Arbor, Michigan. For the moment, the business model appears to be similar to Zipcar's: Short-term rentals that can be reserved via a smartphone app and then picked up and dropped off at designated spots around the city. 

GM said it will launch the Maven service in "major U.S. metropolitan areas" later this year, and that there are ongoing programs at GM facilities in the U.S., Germany, and China that are developing future Maven offerings. 

What does it mean?
Right now, it kind of sounds like a lark: The kind of thing a big company announces, plays with for a year or two, and then drops as it moves on to something else. 

But I think "Maven" could well be a brand we'll be hearing about for years to come. In time, it might even be a significant portion of GM's global business.

Today's announcement -- a car-sharing service operating in one college town -- doesn't sound like much. But consider: Just in the last month, GM has announced a $500 million investment in ride-hailing service Lyft, bought the assets and hired many of the employees of shuttered ride-hailing pioneer Sidecar, and unveiled the production version of the battery-electric Chevrolet Bolt sedan.

I think those things are all closely related. They're all related to GM's plan to meet the "disruptors" of Silicon Valley head on, with (eventually) an automated ride service of its own.

Another seed planted for the future of GM
Lots of companies are developing systems that will give the cars of the not-too-distant future the ability to drive themselves. But not all of those companies are in the auto business. Google's driverless car, the rumored Apple car project, and Uber's well-funded effort to develop its own autonomous-vehicle technology, are all (probably) working toward businesses that will allow individuals to replace car ownership with safe, reliable, on-demand automated ride services. 

Those business are unlikely to kill the existing auto business altogether, at least not for several decades. But they represent a threat to the business of making and selling vehicles as it has existed for decades.

Rather than sitting around waiting for that threat to arrive, GM CEO Mary Barra and GM president Dan Ammann are planting the seeds of an effort to meet those future rivals head-on.

I don't know whether it'll work. But it's a big change for GM, and I think it's the right one.

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