In 2011, Ford Motor Company Chairman Bill Ford gave a ground-breaking TED Talk. Where once he had been concerned about not selling enough cars and trucks, he said, now he was concerned about what might happen if all he did was sell more cars and trucks, and the global light vehicle parc doubled, trebled or even quadrupled. His fear, he revealed, was that by mid-century, we could be facing global gridlock.
For Ford, the solution is ‘smart’; but building smart cars is not enough, said the great-grandson of Henry Ford, whose ambition, a century earlier, was to build cars “for the great multitude”; we also need smart roads, smart parking and smart transportation systems, in a future of zero emissions, but with the freedom to move around that we have today.
That TED Talk signalled a major strategic shift at Ford. Fast forward to 2016, when Ford announced the creation of Ford Smart Mobility, a subsidiary dedicated to developing and commercialising mobility services and investing in mobility-related ventures. The Chairman of the division was announced as Jim Hackett, who now happens to be the Chief Executive of the Dearborn-headquartered OEM.
Ford’s senior leadership has for a few years now been discussing the company’s transition into the ‘Ford Mobility Company’, and the notion of mobility runs top-down, not only in thinking about traditional vehicle mobility, but also in providing alternative mobility in urban environments. “Our CEO has talked about Ford becoming the most trusted mobility brand in the world,” says Sarah-Jayne Williams, who was appointed in 2017 as Director for Smart Mobility in Europe.
“Mobility means different things to different people but, essentially, it’s about how we get from A to B,” Williams explains. “Henry Ford’s vision was that freedom of movement drives human progress. In many ways, that’s still true today. But if you take the environment of cities, that’s no longer true. We want to be able to continue to provide freedom of movement in cities but in ways that don’t contribute to the significant challenges that cities already have around air quality and congestion.”
Smart mobility and smart cities are intrinsically linked – each benefits the other, for the greater good. And with lucrative opportunities in both areas, it’s hardly surprising that Ford is working on both. Navigant Research has identified 355 smart city projects in 221 cities around the world, of which 70 are in smart transportation and 65 multi-sector projects.
There are 25 smart transportation projects in North America, 24 in Europe and 11 in Asia-Pacific. Smart city programs present a growing market opportunity, says Sam Abuelsamid, Senior Analyst at Navigant. “Navigant Research estimates the global market for smart city solutions and services was worth US$40.1bn in 2017. Smart city market revenue is projected to grow to US$94.2bn by 2026, representing a compound annual growth rate of 9.9%.”
By 2050, around two thirds of the world’s population will live in a city. According to the UN, the top ten largest cities by population in 2015 had a combined total of 223 million people. By 2025, that ten-city total is expected to rise to 259 million, a 16.1% increase over ten years; and by 2035, the increase will be 35.9% over 2015, taking the total to 303 million people. Interestingly, the top three cities will be the same, although Tokyo will slip from first place to second by 2035, overtaken by Delhi, with Shanghai remaining in third.
To put that growth into a European context, by 2040, London’s population will grow by 2 million people, to more than 10 million. That equates to about 6 million extra daily journeys – clearly unsustainable under existing infrastructure, and not something that will be solved by London’s commuters switching to autonomous vehicles: autonomous congestion is still congestion.
Hence Bill Ford’s concern, and his enthusiasm for Ford to become part of the solution, rather than part of the problem. In Europe, in line with the OEM’s commitment to become the world’s ‘most trusted mobility brand’, Ford has opened a new office in the Olympic Park in Stratford, London, dedicated to smart mobility, with a team of experts operating under a European remit to investigate future mobility solutions. As well as the moral opportunity, new mobility solutions also come with a lucrative financial incentive for any stakeholder that gets it right; Navigant Research believes ride-hailing alone will generate up to US$1.2trn in revenue by 2026. While Navigant believes the overwhelming majority of the 160 billion rides annually will be hailed in the Asia-Pacific region, its forecast shows that the revenue generated by rides in Europe and North America are far from insignificant.
One of the first moves by Ford’s European Smart Mobility team was the launch of the Urban Electrified Van trial in London. With a steadily growing number of cities across Europe implementing low and ultra-low emissions zones, commercial vehicles still need to be able to operate in cities, cleanly, and without the range anxiety still associated with a pure battery electric vehicle, explains Williams. “The plug-in hybrid electric van in the trial can switch automatically, based on geofencing technology, into EV mode when it goes into the low emission zone. That way we can meet city requirements and our commercial vehicle customer requirements as well.”
The Transit Custom PHEV trial is already under way in London, with 20 prototype vehicles in use by major fleets; a similar trial, using ten prototypes, will begin in Valencia, Spain later in 2018. The Transit Custom PHEV has an electric range of 50km (31 miles), as well as a range extending 1.0-litre EcoBoost gasoline engine.
GoRide and Chariot – Ford’s people carriers
Where the Urban Electrified Van moves goods, Ford’s Chariot ride-hailing activity moves people. Originally a San Francisco start-up, the shared mobility shuttle service was acquired by Ford Smart Mobility in 2016. In the US, Chariot operates in San Francisco, New York, Seattle, Columbus and Austin, and in early 2018, London became its first overseas city. The Ford-branded 14-seater vehicles operate along fixed routes, stopping if hailed by a Chariot customer using the Chariot app. A seat in a Chariot is guaranteed, as is Wi-Fi, USB sockets for device charging, and a notably low single ride fare, paid via the app. At £1.70 (US$2.25) per ride in London, it costs less than the price of a single bus journey. The additional Charter and Enterprise services enable Ford to add further value for Chariot customers, and maximise use of the Chariot vehicles.
In early 2018, Ford announced the acquisition of two smart mobility start-ups, TransLoc and Autonomic. Durham, North Carolina-based TransLoc develops apps for connecting with public transit networks. Autonomic, a Palo Alto-based software company, develops the software for Ford’s global connected car platform, which it refers to as its Transportation Mobility Cloud. Chariot and GoRide – the non-emergency medical transport (NEMT) service run by Ford in North America – are powered by Autonomic’s technology.
The brand versus the brand experience
All vehicle manufacturers are considering their options for the world of future mobility, yet there remains little in the way of clarity in terms of monetising mobility, and even less in terms of defining it. Depending on who you ask, ‘mobility’ might incorporate anything from zero emission propulsion to automation, ride-hailing and ride-sharing to smart public transportation. How, then, does an OEM go about branding its mobility activities? If people no longer own the vehicles in which they ride, how will they know who is operating that service? The counter to that is, of course: does it matter? Some vehicle manufacturers have established sub-brands in which to pool their various activities, including Volkswagen Group’s Moia, and PSA’s Free2Move. Ford has chosen for now to run separate activities. When a customer uses a Chariot, there is barely a hint that they are being moved by Ford.
“Obviously, there’s a Ford badge on the front of the vehicle but, even in the US where there was more publicity [about Chariot] because it was acquired by Ford, many of the customers wouldn’t know that it’s Ford-owned,” says Williams. “The branding is Chariot. And it’s interesting, because I think experience will triumph over brand, particularly as we evolve into an AV world.”
Asked whether this could present an opportunity for Ford to show its leadership in smart mobility, Williams nods. “Yes, I think that’s a good point and I think it is part of the journey that we are on as well, as a big company looking to try new things. We’re known for cars, and one of the strategies that gives big companies more freedom to experiment is to operate it under a different brand. With Chariot, we’re a couple of years in, and the business model is beginning to prove itself. I think it’s good to challenge it and ask whether we will make it a more active part of the Ford branding so that we can deliver on our objective to become the most trusted mobility brand in the world.
“Over time, I think we will begin to see more branded experiences, but it will certainly be interspersed with experiments and trials. And even what we’re doing in London at the moment with Chariot is a trial – we have an initial 12-month licence, but it is a trial, and it’s about learning how to do things and understanding our role in the future of mobility in cities.”
Collaborate and listen
Clearly, the first step in developing a smart cities strategy is to tackle existing challenges, such as congestion. But stakeholders quickly need to move into being an active part of a smart city’s development, and Ford is keen to be involved. “We’re not a specialist traffic-planning consulting firm and can’t bring the depth of expertise that some companies can. But we are certainly becoming part of that conversation and want to be an increasing part of it. I think we’ve got good experiences to add to that and, hopefully, can be part of the solution rather than part of the problem.”
Defining mobility might be a challenge, but defining a typical city is nigh on impossible. “And London is definitely not it,” says Williams. “There are 99 cities in Europe with a population of more than 500,000. And they are hugely diverse in terms of population density, existing infrastructure and political landscape. There is no single typical European city, but that’s also true globally.”
Those 99 European cities have very different societal structures, and very different existing infrastructure, from those with well-established transportation such as London to others with no underground networks, or limited overground rail networks, and different densities of taxi populations.
Smart cities, living streets
As well as developing the products and business models that operate within the city of tomorrow, Ford is active in the discussions about the development of such cities. And it approaches those discussions from a very simple angle: “It starts with the people that live in the cities that we call home,” says Jessica Robinson, Director of City Solutions within Ford Smart Mobility. “We believe firmly that freedom of movement drives human progress outside of any one technology solution within the mobility space. You’ve seen us talk recently about the idea of designing smart vehicles for a smart world. In our City Solutions team, we partner with some of the major stakeholders in cities, including transit agencies, other large enterprises, start-ups and citizens to explore and understand new approaches to ideas, technology and data. We’re after greater access for everyone in those cities.”
Collaboration is essential, says Robinson, echoing comments by Sarah-Jayne Williams. “This is not something we’re going to solve on our own. The challenge is just too big. Our team goes out and has individual conversations with those people at cities who are responsible for transportation. A number of groups have come together internationally to look at what it means to be a smart city, including private sector companies like Ford, public sector organisations, planners and communities.” Ford is one of the partner companies involved in the convention of city mayors organised by Bloomberg Philanthropies and the Aspen Institute, to consider the role and impact of autonomous vehicles.
With her expertise in smart city initiatives, Robinson is also one of the co-founders of Detroit Mobility Lab, established to help Detroit “become one of the world’s foremost future mobility ecosystems”; at the end of May 2018, Detroit Mobility Lab announced a strategic initiative to create the Michigan Mobility Institute (MMI), which will focus on seeking out and educating new talent within artificial intelligence, robotics, cyber security “and other fields that will be vital to making the City of Detroit a global centre for future mobility”. The aim is for Detroit Mobility Lab to expand its team and form a steering committee for the MMI made up of local and global leaders from the public and private sector.
“We’re looking at delivering a broad range of mobility services across layers of the transportation system – vehicles, infrastructure, the connectivity layer and digital services,” says Robinson. “There is a transportation drag and lack of efficiency in the systems that we have today. Whether it’s a smart vehicle or a smart public transit system, we have an opportunity to bring all of those things together in the smart cities of the future.”
Ford, notes Robinson, looks at the concept of a smart city from the perspective of “intended outcome, quality of life, safety, time and convenience, and access to jobs.” The OEM, she adds, has “matured from looking at technology deployment to looking at some of those intended outcomes. At Ford, we are looking at the idea of a living street – the street, road and sidewalk are the soul of our communities, and so it’s important to remember that roads must have a certain capacity for vehicles, but the streets themselves really should be designed for people.”
A new way of thinking
A crucial step in defining the role of the car in the city of tomorrow will be the move away from designing cities around cars, to designing cars around cities. But is this happening? “It has to!” says Robinson. “We’re focused on making sure cities today, and in the future, smart cities, aren’t built solely around automobiles, but they take into account the people who live there.”
Looking ahead, Robinson says that although there will be transformational advances in autonomous vehicle technology and the application of artificial intelligence, the greatest progress in the development of smart cities will come from the inclusion of other aspects of life in the mobility debate. “I think we will start to see conversations about mobility include other factors. It will be mobility plus connectivity and infrastructure, mobility in the context of health issues, mobility and housing costs. There will be an increased recognition that mobility is an underlying and critically important aspect of a city as an economically vibrant place. That will lay the groundwork for all the new self-driving technology that we will undoubtedly see.”
And, as Sarah-Jayne Williams is keen to underline, there is support from the most senior levels of the company’s leadership: “It really helps that the former head of Smart Mobility is now the CEO of the company!”
This article appeared in the Q2 2018 issue of Automotive Megatrends Magazine.