How GM plans to prosper when people stop buying cars

If you’re bullish on ride-sharing firms Uber and Lyft—both now public—you probably believe in a future where fewer people own cars, more people hail rides, and self-driving cars will eventually show up when you need them and disappear when you don’t.

This leaves a big question unanswered, however. If fewer people own cars, who’s going to provide all those vehicles Uber (UBER) and Lyft (LYFT) now essentially rent from their owners?

General Motors (GM) has an answer: Maybe us.

I recently asked GM President Mark Reuss if the automaker could morph from a manufacturer selling 8.4 million cars per year to a fleet operator managing some of these vehicles, for hire to Uber, Lyft and other ride-hailing outfits.

“Absolutely,” Reuss said at the ”Wall Street Journal Future of Everything Festival” in New York. “We’re doing that right now in San Francisco and Arizona. People will be able to buy and pay for the ride by us.”

That might sound like GM could end up competing with Uber and Lyft. Er, yes and no. GM owns about 6.4% of Lyft, a stake it could sell for a profit or hold onto for strategic purposes. GM also bought the startup Cruise Automation in 2016, to buttress its self-driving technology. Cruise has an internal ride-hailing app for San Francisco employees, called Cruise Anywhere, which lets the company test different types of fleet operations, including self-driving rides in electric Chevy Bolt hatchbacks made by GM.

Automakers are scrambling to keep up with developments in transportation, to make sure tech upstarts don’t disrupt them into oblivion. They’re trying “subscription” services that let drivers pay a monthly all-in-one fee for a car, insurance and maintenance, with no down payment required. Other automaker programs let drivers pick up a car when they want one, similar to Zipcar. And virtually all automakers are pursuing self-driving technology that could allow drivers to order a car as needed, with the car delivering itself and returning to a depot when the mission is complete—leaving garages empty all across America.

Reuss thinks real-world needs will determine when new types of transportation roll out first. Self-driving cars, for instance, might appeal most to seniors who can no longer drive. “They'll show up in the places where they're going to solve problems for people,” Reuss says, “whether you're too old to be driving a car, but you need the mobility and enjoy the mobility. That still provides freedom.” Fleets of self-driving cars for hire will probably materialize first in dense urban areas, where reduced car ownership could help reduce congestion.

The cost of owning a car is relatively low right now, compared with ride-hailing, renting and other options. But self-driving cars could change that equation, with some car owners opting to join a car-on-demand service instead of owning a vehicle outright. “The upside on this really isn’t known,” Ruess says, “but I can tell you it’s big.”

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Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman