GM, Lyft, and Higher Education

Investing in, and learning from, what’s next.

January 4, 2016

General Motors is investing $500 million in the ride-sharing / Uber competing service Lyft. The NYTimes reports that the GM investment goes beyond financial backing, as the two companies will be collaborating an “autonomous on-demand network of self-driving cars”. According to the Times story, "GM will also work with Lyft to set up a series of short-term car rental hubs across the United States, places where people who do not own cars can pick up a vehicle and drive for Lyft to earn money.” Wow.

The Times goes on to comment that "The alliance with GM is surprising because automakers could consider ride-hailing companies like Lyft as long-term threats to auto sales.”  GM’s president Dan Ammann (who will be joining the Lyft Board), explained the investment this way:  "We think there’s going to be more change in the world of mobility in the next five years than there has been in the last 50...From a GM perspective, we view this as much more of an opportunity than a threat.”

One of the fascinating announcements about this alliance is GM’s plans to open up rental hubs across the country where Lyft drivers can rent GM cars.  The idea is that GM can offer cars (and financing) at prices that will make driving for Lyft possible for those that don’t already own a suitable automobile.  The GM OnStar system could also be potentially integrated into the Lyft service.

Okay, what does any of this have to do with higher ed?

What if incumbent (legacy) colleges and universities are like General Motors?

What if new postsecondary providers are like Lyft?

From GM's perspective, the world of urban transport is set to undergo massive change. GM (and many others) see a future where city residents move to consuming transportation as a service.  The first step will be eschew car ownership for smart-phone activated ride-hailing.  Faster than we realize, these cars will become autonomously driven - a technological, social, and legal shift that will further lower transportation costs. GM wants to be a part of creating (and profiting) from this future, rather than a passive victim of this shift.

What is the analogous shift in postsecondary education?

What will be the threat to higher ed that is as existentially large for us as the move away from individual car ownership will be for GM?

I think that those of us in higher ed are too slow to look for lessons from other industries.  We think that we are special.  We tell ourselves that we are nothing like transportation, energy, media, publishing, tourism, hospitality.  We believe that since we are mission driven, not-for-profit (mostly), and oriented to the social good that we are somehow special.

Could it be, however, that other industries have something to teach us in higher ed?

It just may be that a company like GM, a company that without a government bailout would have disappeared, has learned a thing or two that might be of some use to us?

General Motors seems willing to invest, experiment, and participate in what comes next after the world of individual car ownership disappears. This shift from owning cars to cars-as-a-service may never be total. Outside of dense urban areas, and cut-off from multimodal public transport, car ownership remains mostly essential for employment and mobility. If I lived in a big dense city, however, there is no way that I’d own a car. I’d take the subway, ride Uber and Lyft, walk or ride my bike everywhere. There is always Zipcar for those rare occasions when having a car for more than a few hours is called for.

Help me out with this analogy.  GM is to Lyft as higher education is to _______.

Competency based education?

Boot camps and academies?

Alternative credentialing, micro-credentials, and badging?

Open online education?

What am I missing?

Should colleges and universities take a page from GM and make room for strategic alliances with those platforms that threaten our traditional bundled service?

Are we like GM in the 1960s, unaware that new competitors like Honda and Toyota will soon take our market share and profits when whatever the higher ed equivalent of the expensive oil (gasoline) materializes?  In 1960, GM had a market share of 48.3%, while the total import market share was 7.7%. Can any of us in higher ed today imagine a situation where our market share and influence follows a similar trajectory as GM from 1960 to today?

This G.M. investment in Lyft makes good sense to me. I applaud GM for being willing to take a risk and embrace a future very different from today’s reality.  

When was the last time we in higher ed made a similar leap?



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