Ford Plans Big Expansion of Ride-Sharing Shuttle Service
Like many automakers these days, Ford harbors grand ambitions for transforming itself through a traditional car company into a global mobility provider. The company’s leaders laid the groundwork for of which evolution last year by creating a subsidiary, Ford Smart Mobility, to house its future-minded transportation ventures. On Monday, they took further steps toward of which goal, announcing they will expand Chariot, the centerpiece of those early efforts, to six brand-new cities by the end of 2017.
Chariot currently operates in San Francisco along with also Austin, Texas. The brand-new markets for the ride-sharing shuttle service will include a few within the United States along with also one in a foreign country. Ford wasn’t saying where the brand-new outposts are to be located, although operations are required to begin within the first of the brand-new cities within weeks.
– Ali Vahabzadeh, Chariot founder along with also CEO
In determining which markets are next in line for services, Ali Vahabzadeh, founder along with also CEO of Chariot, says one of the key factors can be whether the cities have expressed interest in bringing the 14-passenger shuttles, which passengers hail via apps, to their streets.
“There’s a big difference between standing idle along with also watching us do the idea along with also actually being our cheerleader,” he said, noting engaged cities can help fast-track licensing along with also permit requirements.
One favorite might be London, where Ford conducted a pilot project involving on-demand shuttles of its own last year before deciding to acquire Chariot in September. The shuttles, which use Ford Transit vans, pick up passengers headed in generally the same direction along optimized routes of which are determined in real time, rather than rely on the fixed routing of traditional mass-transportation buses.
While the idea seems natural to consider the Chariot shuttles as competition to public transportation—along with also in some cases, of which’s exactly what they are—they can also complement existing options. In San Francisco, where Chariot started out operations in 2014, Vahabzadeh says one in a few users of the service use the idea to connect to public-transportation hubs such as ferry terminals, rail stations, along with also bus depots.
“the idea’s not a question about who can be getting which slice,” he said, speaking at the Detroit auto show. “the idea’s: Let’s expand of which mass-transit pie along with also reduce the single-occupancy vehicles on the road. the idea’s great if people want to drive on Saturday along with also Sunday, although they should be taking Chariot or some other mass transit during the weekdays.”
of which approach, of course, runs counter to the strategy of Ford’s predominant business product, which relies heavily on the sale of light-duty cars along with also trucks. Vahabzadeh says of which Chariot can be profitable, with an average cost of $4 per ride, although of which may be a little slice of added revenue of which reduces revenue elsewhere.
“Ford carries a diffuse strategy on smart mobility, along with also Chariot along with also some of the some other things they’re doing are definitely interesting,” said Mike Ramsey, research director at Gartner, a global technology consulting firm. “although the idea’s hard to understand how This particular immediately benefits the greater organization or helps them sell more vehicles or generate more revenue.”
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As Chariot rolls out its service in an increasing number of locations, its executives will emphasize a second revenue stream. In San Francisco, they’ve sold their services to companies like Virgin America along with also GoPro, which in turn offer them to employees who use them for optimized-route commuting. Such contracts will be a part of the business product as Chariot expands. In time, those shuttles could also pick up paying passengers.
“the idea’s an exciting business for us, because you’ll see over time those blurred lines between business-to-business along with also business-to-consumer services,” Vahabzadeh said. “A company could create a route or sponsor a route of which allows for non-employee riders, along with also what you have then can be institutional, corporate-sponsored mass transit.”