Ford Motor Co. (NYSE:FC) is hard at work trying to reimagine how people get from one place to another. Leading the way is Ford Smart Mobility LLC chair, Jim Hackett. Hackett used to be CEO at office-furniture maker, Steelcase Inc. (NYSE:SCSA).
Hackett’s job at the subsidiary Ford formed in March is to look into new areas in ride hailing, car sharing and self-driving vehicles for Ford to develop.
To Own Or To Share
One interesting long-range development in autonomous technology is the notion that in some large cities at least, car ownership may dwindle or even become illegal. Strange as it sounds, residents of traffic-clogged cities might actually applaud the effort.
In a nod to that notion Ford, in September, acquired San Francisco-based shuttle bus startup, Chariot for $65 million. Chariot uses 100 Ford Transit 15-seat vans to run 28 crowdsourced routes.
In addition to Chariot, Ford also announced a collaboration with Motivate, a bike-sharing service in the Bay area. The idea was to integrate everything into Ford’s FordPass app, allowing customers to eliminate the need for personally-owned transportation in the area.
The Self-Driving Angle
Hackett’s Ford Smart Mobility is front and center on all parts of the company’s efforts to reimagine transportation and nowhere is that more apparent than in the area of autonomous vehicles.
To that end Ford CEO Mark Fields said “It’s no longer about how many vehicles we can sell, it’s about what services we can provide. We understand that the world has changed from a mindset of owning vehicles to one of owning and sharing them.”
One Ford strategy has been to accelerate efforts to build a fully autonomous car by 2021. The vehicle will be used for robotic taxi services in urban areas at first but should become widely available by 2025 or so, according to Ford.
A Profit-Rich Sector
Ford’s motive for being so interested in mobility is simple – profit. Company executives believe its mobility efforts will return something in the neighborhood of 20% versus the single digit returns its automotive business generates.
The move won’t be cheap and it won’t pay off soon but Ford believes patient investors will reap significant rewards. For now, the company is trying to cut costs to pay for new development as it begins to sort out and eliminate the bad ideas from the good.
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Roadmap To Success
Meanwhile, Hackett says his division and the company have 3 priorities for 2017.
“First,” Hackett says, “to build the where-to-play, how-to-win strategy around the world. Two, building out the rest of the team to pull this off. Three, I’ve been given a license for creative ideas and I need some early wins. This [van-shuttle service] is in place and expanding. It’s already gone to a second city. It’s on its way to four other cities in the first 16 months.”