GM is investing $500m (Â£340m) in Lyft as part of a $1bn fund raising initiative and will take a seat on the San Francisco-based company's board.
"We see the future of personal mobility as connected, seamless and autonomous," said GM president Dan Ammann.
Lyft president John Zimmer said his company shared the same vision.
A number of technology companies, most prominently Google, are looking at developing driverless cars. Reports suggest Apple is also building prototypes of what are called autonomous cars in the US.
But established carmakers are also in the race, with Daimler, Tesla and others investing in the concept.
The tie-up will focus on two main areas. The first is the "joint development of a network of on-demand autonomous vehicles".
Mr Ammann said that "with GM and Lyft working together, we believe we can successfully implement this vision more rapidly".
"We see the world of mobility changing more in the next five years than it has in the last 50."
The second is giving Lyft drivers easy access to renting GM cars.
Despite various companies' best efforts to develop driverless cars, there remain many barriers to widespread adoption, critics argue.
Quite apart from the technology challenges, which may in time be overcome, there are regulatory issues based on ethical arguments and insurance considerations based on questions of responsibility.
US car giant General Motors (GM) is teaming up with car sharing service Lyft to develop a fleet of driverless vehicles.