Fri | Jan 19, 2018

Ford expands into shuttle service, bicycle share

Published:Friday | September 9, 2016 | 6:34 PM


Ford Motor Co is buying an app-based shuttle service and partnering with a bike-share company as part of its ongoing effort to expand its traditional business. It is buying Chariot, which currently operates 100 14-passenger Ford Transit vans in the San Francisco area. The shuttles determine their routes by users' needs. Ford says it plans to expand the shuttle service to five more cities over the next 18 months.

The automaker is also partnering with Motivate, a New York company that runs bicycle sharing programmes in 11 US cities and in Melbourne, Australia. Ford says it plans to increase Motivate's San Francisco fleet from 700 to 7,000 bikes by the end of 2018, using bicycles made in Detroit. It also will increase the number of stations where riders can get bikes. Its program, called Ford GoBike, will be accessible through its FordPass app, which launched earlier this year.

FordPass currently lets users find and pay for parking or remotely start their cars. But the company envisions a day when Ford car owners and non-owners could use the app to co-ordinate shared rides, rent cars or bikes and link up to public transportation. Ford could collect valuable data on where customers go and which transportation options they use. Ultimately, Ford could even offer rides in the autonomous cars it is developing.

Ford said it's also creating a team that will work with cities around the world to propose solutions to traffic congestion and run pilot programmes like shuttle services.

The moves are among the first by Ford Smart Mobility, a Silicon Valley-based subsidiary formed in March to invest in promising start-ups and explore new modes of transportation.

Ford CEO Mark Fields says half the world's population now lives in cities and by 2030 that number is expected to grow to 60 per cent. Congested cities hurt Ford's core business, because cars become an expensive hassle to own in big cities.

Fields says instead of just trying to sell cars in crowded cities, Ford wants to be part of the solution to congestion and keep an open mind about new ways to get around.

"Our whole reason for being, going back to Henry Ford, is making people's lives better and changing the way the world moves," Fields said. "We not only think we could do some societal good here, but we could also generate some business opportunities for us."

The company isn't saying how much it is spending in the all-cash deal for Chariot, which will operate as a wholly-owned subsidiary.

Ford's shares dropped 2.8 per cent to close at US$12.38, amid a broad market slump.

It has been running pilot shuttle programmes in Kansas City, New York, London and other cities for several years. Jim Hackett, chairman of Ford Smart Mobility, said those tests confirmed the potential of shared shuttles. Algorithms developed by Ford and Chariot will be used to map out the best route for the shuttles.

Ford's plans are just the latest in a rapidly changing mobility landscape. Ford's crosstown rival, General Motors Co., invested US$500 million in ride-hailing service Lyft earlier this year, while Fiat Chrysler inked a deal to supply test vehicles to Google's autonomous car project. Late last month, Volvo Cars signed a US$300 million deal to develop self-driving cars with Uber.