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Ford Seeks Own Path to Car Sharing and IoT

Ford Seeks Own Path to Car Sharing and IoT
by Roger C. Lanctot on 11-10-2016 at 4:00 pm

 It’s hard to be a thought leader around the future of transportation when the entire market seems to be moving in one of three directions simultaneously: either ride hailing (Uber, Lyft), car sharing (Zipcar, Car2go) or automated driving (Google, Tesla). If you’re Ford Motor Company and you care about whether you are adding to or mitigating existing congestion with new driving options, it is even harder.

The goal of any new transportation solution ought to be to reduce the traffic load on existing highways. The consensus opinion is that the available infrastructure is finite and any new transportation solution should be intended to reduce the demand rather than increase it.

Car sharing clearly is adding to the vehicle load on existing infrastructure. That load can be expected to grow around the world with car sharing service penetration currently so low and with the wave of car sharing startups still rushing in. Experts have already sounded the alarm that car sharing services – as well as ride sharing suppliers – are drawing consumers away from public transportation.

While experts have suggested that car sharing and ride hailing services will diminish the demand for new cars no less a voice than Boston Consulting Group has only attributed a diminution of vehicle demand of about 800,000 vehicles five years hence out of a market of 100M vehicles sold. Clearly, ride hailing and car sharing, if anything, represent a net addition to the number of cars on the road.

What is emerging is a fragmentation of transportation which is akin to the fragmentation of content consumption taking place in the car. Radio broadcasters are concerned that in-car listening has been diminished by the increasing access to streaming services via connected smartphones. The simple reality is that people are still listening to their car radios, but they are divvying up their listening among different sources.

So it goes with transportation. Car sharing options on streets and parking garages create new use cases which are not mutually exclusive. Ford has sought a different path and that path is reflected in its acquisition of Chariot.

Unlike the majority of existing car sharing services offering smaller vehicles like Daimler’s Smart or BMW’s i3, Chariot makes use of Ford’s Transit Connect vans and focuses on pooling passengers largely though not exclusively to and from public transit stops – crowdsourcing its routes based on demand. In reality, many city planners have discovered that this is precisely the application served by Uber and Lyft. The difference is the focus on carpooling – though this is also served by Uber and Lyft.

This positions Ford in direct opposition to Uber and Lyft without posing a threat to the existing taxi fleet. Ford has threaded the transit needle and is poised to take this opening to cities beyond its San Francisco beachhead.

What is even more unique about the Chariot play by Ford though is that the vehicles being used come from Ford’s fleet division, for which car sharing is a natural extension. Car sharing initiatives belong with fleet applications. Ultimately, shared vehicles will be networked and share information – setting the stage for the connection of passenger cars in the future.

It is no coincidence that Ford’s year-old Go Drive initiative in London was shut down at the end of October. Ford has likely concluded that just adding car sharing to the streets of London or any other city around the world is only adding to the vehicle load on already stressed streets.

Ford Executive Chairman William Ford has been advocating for four or five years for connected and shared transportation. With the acquisition of Chariot, Ford Smart Mobility is starting to take shape while shaping a leadership position on the future of transportation for Ford.

At the same time, Ford is beginning to make progress on its wider vision of automated driving and a connected transportation world built upon IoT principles. Ford appointed Laura Merling to head autonomous vehicle development within the Smart Mobility Group. Merling brings to Ford an IoT background from her work at SAP and AT&T.

At the same time, Ford announced a long-term tie-up with IoT kingpin Blackberry. Blackberry says it is dedicating a team to work with Ford on expanding the use of Blackberry’s QNX Neutrino operating system, Certicom security technology, QNX hypervisor and QNX audio processing software.

Ford, like a growing roster of other auto makers, is looking to partner with cities to help resolve transportation challenges. Ford’s vision of shared transportation based on crowdsourced routing is clearly intended to reduce the vehicle load within city limits.

Of course, the Chariot-related strategy might also negatively impact vehicle sales, but Ford is clearly making the calculation that either this is not the case or, if so, it is worth the sacrifice. The Ford Focus’s deployed in London for the Go Drive trial are gone suggesting that passenger-vehicle-based car sharing is not in the cards for Ford – at least not at the moment.

The last missing piece of the strategic puzzle is FordPass. What appeared at introduction to be a payment, parking and pedestrian navigation platform has yet to pan out. One of the handful of original apps, FlightCar, is now defunct.

FordPass may yet help to knit Ford’s IoT vision together. My personal recommendation has been to build in navigation and related location resources and services – integrated with Ford’s existing in-vehicle app resources.

Ford has not been shy about grabbing headlines – particularly with its announced plans to be mass producing automated vehicles by 2021. But taking that announcement in the context of the subsequent Chariot acquisition paints a clearer picture of Ford’s goal to reduce the need for private vehicle ownership within cities – with the ultimate goal of automating that transportation and enabling connectivity between transportation assets and infrastructure.

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