With Personal Automobiles in the Rear View Mirror, Ford Looks Ahead to Life as a Mobility Company

We do not know how soon our future cars and trucks will be both powered by electricity and roam our streets autonomously, but as is the case with television, computers and smartphones, self-driving cars will most likely become our reality much quicker than we think. To that end, automakers such as Ford are rallying as fast and nimbly as they can to not only stay relevant, but thrive in the near future. Various Ford executives, along with futurists and leaders in the technology sector, gathered at San Francisco’s Fort Mason last week to share their vision at a symposium aptly titled “City of Tomorrow.”

Overall, speakers waxed optimistically about this future, one in which individual car ownership becomes a relic of the past and mobility as a service is entrenched as the norm. While it may be clear to Ford that their 100-year-old business model is becoming outdated, and may not even survive as ground transportation undergoes this makeover, the company projects enthusiasm for how it can contribute to the “smart cities” of tomorrow. “We believe mobility is a fundamental human right,” said Marcy Klevorn, Ford’s executive vice president and president of the company’s mobility division in opening the symposium.

Whether the ability to move around a community on wheels is a “human right” merits its own debate. But the reality for Ford is that automakers really do not have a choice but to adapt to this new reality. Cities are becoming more crowded; more consumers are eschewing the hassle and expense of car ownership; and city planners are increasingly open to urban layouts that bend to the will of pedestrians and cyclists, not just to automobile owners.

Janette Sadik-Khan, Commissioner of New York City’s Department of Transportation during the second half of Mike Bloomberg’s administration, highlighted the benefits of such an approach. And she spoke eloquently of this new way of thinking in cities; after all, she arguably sparked the trend of urban planners designing streets to a place for everyone, not just cars.

Now, New York is emerging from the long shadow of Robert Moses, New York’s post-war master urban planner who demolished neighborhoods in favor of massive high-rise housing projects and concrete expressways. To critics, his urbanization legacy was one that favored cars over people as he constricted the growth of the city’s public transportation system. But New York’s landscape has changed drastically under Bloomberg and Sadik-Khan: eight new rapid bus lines, the largest bike-sharing network in North America, dedicated bicycle lanes, more green space and at least 60 new public plazas, many of which were completed on the cheap with some paint, barricades, tables and chairs. Now other cities are looking to New York, as Sadik-Khan noted, “When you change the streets, you change the world.”

Automotive companies will have to find a way to squeeze their way into this new paradigm.

Nevertheless, this changing world offers plenty of opportunities for Ford and its competitors, even if car ownership declines. Indeed, those same millennials who are avoiding cars also have goods delivered to them with increasing frequency. That “last mile” of delivery, often the most expensive, most inefficient and least controllable stage of transporting goods, has long bedeviled countless companies from Domino’s Pizza to UPS. This market certainly provides Ford an opening: As Uber and Google duke it out over who will reign supreme in the autonomous vehicles space, Ford could very well carve a lucrative niche with self-driving commercial delivery services.

Ford, however, faces two challenges on this front. First, the company clearly has to hustle if it will attain its goal of having the first wave of self-driving cars on the streets by 2021. Second, the company needs to exploit this market within the dated and congested infrastructure where these same millennials want their meals and gadgets delivered – yet at the same time, they do not want those beverage delivery trucks blocking traffic or waking them up early in the morning or disturbing them at night. “We need to use the infrastructure we have now,” said Laura Richards, a transportation planner with Washington, D.C.’s municipal government, told last week’s audience in San Francisco. “We won’t build more streets, so technology can help.”

What is exciting about this shift towards self-driving cars is that we really do not know what this system, and these vehicles, will look like. One reason many consumers share a collective freak-out over how a world of autonomous vehicles will function is because we are envisioning the future with images of twentieth-century cars. But our streets in 2030 will look and function far differently, making it difficult for many of us to wrap our heads around this scenario. Hence the drive by Ford’s new CEO, Jim Hackett, to revamp Ford as more than an automaker, but also as a leading technology and software developer. “If you want to have a smart city, let’s work on the transportation system first,” he told City of Tomorrow guests last week.

If autonomous vehicles will become the future, this new world must be inclusive. Several speakers warned that self-driving cars will not provide much change if the internal combustion engines of yesterday and today are simply swapped out with all-electric autonomous cars, keeping streets congested and pricing many citizens out. Furthermore, the automakers need to respond to the needs of both consumers and municipalities. Karina Ricks, Pittsburgh’s director of mobility, referenced the city’s contentious relationship with Uber. “The deployment of autonomous vehicles is happening in Pittsburgh, but not with Pittsburgh,” she said.

Ricks also warned that autonomous vehicles need to be more than just the next big thing for early adopters if this next generation of transportation will truly work for cities. “We need autonomous vehicles to support social equity,” she continued, “But we can’t have autonomous vehicles as private status vehicles; we need them as shared resources.”

Ford’s task is to remain agile as these technology developments are shifting rapidly while finding ways to profit in a world where shared rides become the standard. “The technology is always going to move, and move fast. The question is what sticks and what’s really going to change how people think about the vehicle and mobility over time,” wrote Parrish Hanna, Ford’s global director of interaction and ergonomics in touting Ford’s progress on harnessing the latest in digital technology.

If Ford can capitalize on this new way in which we not just use, but consume transportation, Ford could enjoy a resurgence far outpacing the boom it enjoyed after the 2008-2009 global financial crisis. And that pressure is on, as the company’s shareholders seek more than the modest uptick its shares have enjoyed this week.

Image credit: Ford

Editor’s note: Ford funded Leon Kaye’s trip to San Francisco. Neither the author nor TriplePundit were required to write about the experience.