General Motors has announced that it is investing $500m (€46.5m) in US ridesharing firm Lyft.

The funds, which form part of a $1bn financing round for Lyft, will be used to create an integrated network of on-demand autonomous vehicles in the US. In addition, GM will hold a seat on the company’s board of directors.

The partnership will develop ride-hailing autonomous vehicles whilst, with immediate effect, GM will become a preferred provider of short-term use vehicles to Lyft drivers through rental hubs in various cities in the US. Vehicles will also offer GM’s portfolio of cars and OnStar services.

“We see the future of personal mobility as connected, seamless and autonomous,” said GM president Dan Ammann. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”

John Zimmer, president and co-founder of Lyft, added: “Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives. Together we will build a better future by redefining traditional car ownership.”