Ford (F) continued its deal-making in Silicon Valley on Friday, as the Detroit automaker unveiled plans to take a San Francisco-based shuttle service to more cities.
Continue Reading Below
Ford agreed to buy Chariot, which operates nearly 100 Ford Transit shuttles in the Bay Area. The shuttles currently operate on 28 routes based on rider demand, but in the future, Ford will run the shuttles based on data algorithms that map the most efficient routes on a real-time basis.
Ford will bring its shuttles to at least five more markets in the U.S. over the next 18 months. In an interview on the FOX Business Network, Ford CEO Mark Fields said the company has global ambitions for the service.
The shuttles will give commuters the convenience of a taxi, while the cost will be closer to mass-transit fares. And unlike mass transit, the shuttles will go directly to riders.
“Part of our ‘Why’ as a company has always been about making people’s lives better and help changing the way the world moves. So we’re looking at this and saying, here’s a business opportunity. If the world is moving more towards not only owning vehicles, but sharing them, how can we participate in that,” Fields told FBN’s Liz Claman on “Countdown to the Closing Bell,” adding that Ford wants to be part of the solution.
“At the same time, [the program] could provide us a great business opportunity and actually touch the Ford brand to folks who may not have even thought about buying a car in the future, so it exposes them to the Ford brand.”
Continue Reading Below
In addition to its Chariot deal, Ford has teamed up with bike-sharing firm Motivate to launch Ford GoBike, which is scheduled to launch next year. Ford and Motivate plan to add new stations and increase the number of bikes in the Bay area to 7,000 by the end of 2018. Financial terms of the deals weren’t disclosed.
Both the shuttle service and Ford GoBike will be accessible through the FordPass platform.
FordPass is an app that serves as a hub for Ford’s mobility efforts, including car-sharing. The app also offers roadside assistance and information about an owner’s car. As for the app’s capabilities, it can warn a bike user of an upcoming storm and offer up the shuttle service as an alternative.
Ford has ramped up investments in transportation services and new car technology, including advancements in self-driving vehicles. The automaker formed the Ford Smart Mobility subsidiary in March, saying the unit would create mobility services and invest in others. Ford recently set a goal of developing fully autonomous vehicles for ride-sharing services by 2021.
In a statement announcing the Chariot acquisition, Ford Smart Mobility Chairman Jim Hackett said the company is searching for ways to alleviate congestion in cities around the world. Also, “by expanding our business model to include new forms of transportation – from bikes to dynamic shuttles and more – we are introducing new customers to Ford and creating new revenue and profit opportunities for the future,” he added.
Approximately 60% of the world’s population will live in cities by 2030, Ford noted. Today, that number is about half the global population.
The company also said Friday it established a City Solutions team to work with cities on new transportation solutions.
The tech moves come after Ford cut its 2016 forecast for operating earnings by 6% to $10.2 billion, citing a $640 million charge tied to an expanded recall for defective door latches. When Ford reported second-quarter earnings in July, executives issued a cautious view for the rest of 2016 amid concerns over a weaker retail market and the aftermath of the U.K.’s Brexit vote.