GM General Motors Company

General Motors Co. will expand its new car-sharing service to additional urban markets, the latest foray by the Detroit-based auto giant into alternative transportation options in cities where car ownership could be losing favor.

GM's Maven, an hourly car-rental service launched earlier this year in Ann Arbor, Mich., Chicago and New York, will expand to Washington, D.C. and Boston. The Maven division is one of several car-sharing services available in the U.S., including several run by auto makers.

The move comes as U.S. auto sales are on track to top the record volume set in 2015. Even with strong light-vehicle demand, car companies are racing against Silicon Valley firms to offer alternative transportation options as more people move to tightly-packed cities, a trend that could eventually dent demand for new vehicles.

Maven rents Chevrolet Volt plug-in cars, Malibu sedans and other vehicles for $6 or more per hour. Unlike conventional rental car firms, which typically buy large volumes of vehicles from auto makers and rent them out for a day at a time, Maven is among the growing number of firms lending out smaller fleets of cars for shorter duration.

The hourly rental market is already crowded, including Zipcar service owned by Avis Budget Group Inc. GM said demand for its car-sharing service has been higher than expected, but declined to disclose utilization rates.

As part of an expansion, certain residential buildings in Chicago, Washington and Boston will be equipped with Maven cars for tenants to use for an hourly rate, while other Maven vehicles will be parked throughout the cities for anyone to reserve using a smartphone app developed by GM.

GM is developing Maven as a platform for deploying a range of services. In Chicago, for instance, a collaboration with parking company Zirx Consumer Services Inc. would allow customers to reserve vehicles using the Maven app and have them delivered.

Maven employees, some of which were recruited from Zipcar, are split between San Francisco and GM's Technical Center in Warren, Mich. The Warren office resembles a Silicon Valley startup, with an open floor plan, ping-pong table, and a section where the team tests technology on a black Cadillac ELR plug-in hybrid.

Maven chief of technology, Paul Pebbles, in an interview said the unit is focused on addressing problems that some at GM aren't typically accustomed to tackling. "If you're here to help deliver results, great," he said. "If not, you won't stay around long,"

The Maven effort is one of a handful of moves GM has made in new transportation ventures in recent months the past year. In January, GM announced a $500 million investment in the ride-sharing firm Lyft Inc. and separately acquired assets and personnel from the ride-sharing firm Sidecar.

Shortly after GM invested in Lyft in January, Maven employees sat down with the Lyft team to discuss possible areas of collaboration. They created rental hubs where Lyft drivers could rent GM vehicles for a discounted rate and implemented that idea by March with a hub in Chicago.

Mr. Pebbles said Maven is working on a number of other technology projects that aren't ready to be disclosed publicly. He said the mentality within large companies is to set targets well in advance and hold people accountable, whereas he wants Maven to have room to pivot quickly.

Write to Gautham Nagesh at gautham.nagesh@wsj.com

Corrections & Amplifications: Certain residential buildings in Chicago, Washington and Boston will be equipped with Maven cars for tenants to use for an hourly rate. An earlier version of this article incorrectly said there would be no cost. (May 19, 2016)

(END) Dow Jones Newswires

May 19, 2016 10:25 ET (14:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.