Ford developing a strategy to address urban personal mobility globally; a mobility company, not just an auto company
|Rough map of Ford’s Blueprint for Mobility. Click to enlarge.|
Ford Motor Company is mapping out a strategy to address the requirements for personal mobility in the context of the megatrend of increasing global urbanization, both in mature economies as well as in emerging markets. If Ford thinks of itself as a mobility company, rather than just an auto company, said Ford Chairman Bill Ford at the recent, second annual “Go Further with Ford” trend conference, “that really opens up possibilities.”
The Ford chairman had already begun talking about the future of urban personal mobility in the context of ever-increasing congestion at the TED2011 conference in Long Beach. During his keynote address at the 2012 Mobile World Congress in Barcelona earlier this year, he outlined a plan for connected cars to help avoid a potential future of what he called “global gridlock—a never-ending traffic jam that wastes time, energy and resources.” (Earlier post.) At the Go Further with Ford conference, he expanded on a broader vision for personal urban mobility supported by an integrated network of different modes of transportation optimized for cities of the future.
I believe that we need to attack this issue of personal mobility in a very different way than we have traditionally looked at transportation. So, what does that mean? Well, it means maybe different business models. We’ve already seen things like ZipCar come up. There’s lots of new technology, some of it has been invented, a lot of it needs to be invented. Vehicle-to-vehicle communication; vehicle-to-infrastructure communication.
In the world that I think has to happen, when you think of a major city, you think of the transportation assets: subways, bicycles, pedestrians, the buses, private cars, the cabs, they are all going to have all to be integrated into one network. If we do that, I think we can provide individual mobility that people would like.
I’m not sure we’ll be the integrator. We’d like to be, but I’m not sure we’re the most natural integrator. But we’ll work with companies that will do that. Because it’s not just autos, and not just tech, it’s urban planners. That’s going to have to be a big part of it. Policy makers. You think about autonomous driving, and then sensor collection, there’s going to to be privacy issues that are going along with cloud computing coming into your vehicles..we’re going to really need to think through the notion of mobility and it’s going to bring in a lot of non-traditional [elements]—for an automotive company these are all non-traditional—and yet I’m really excited by it. If we as a society can pull this off, we are really make peoples’ lives more enjoyable and freer in next 50 years.
This is really kind of what what my great grandfather did. He had a saying, “opening the highways to all mankind”. This is what he felt he did...If you think of what Henry Ford did, he didn’t invent the car, he made it available to everybody.
We at Ford use the term “democratization of technology”... that’s what I think we should be going going forward...I think of this whole urban mobility topic really along these very same lines. It’s kind of like a reinterpretation of my great grandfather opening highways to all mankind…but instead of the highways, it's going to be mostly urban areas.
I expect we’ll always be making cars and trucks, but we may be doing something else very different as well. If we think of ourselves as a mobility company rather than just as an auto provider, that really opens up possibilities.—Bill Ford at Go Further with Ford
Mature markets. Like some other OEMs (e.g., Daimler’s car2go initiative), Ford has already taken steps to exploring new business models such as car sharing in mature markets, in Ford’s case via a strategic alliance with ZipCar establishing Ford as Zipcar’s largest university vehicle partner.
Some 42% of 25-34 year olds are likely to live in a city or urban environment rather than in the suburbs, according to research cited by Ford. That, combined with a preference for automotive access rather than ownership, is helping to the success of models such as car sharing.
|Millenials and transportation. Source: ZipCar. Click to enlarge.|
At the Go Further with Ford event, Gretchen Effgen, ZipCar’s director of business development, cited figures (diagram right) showing that 55% of licensed drivers aged 18-34 decided consciously to drive less in 2011, compared to 45% in 2010. The number for drivers aged 35-44 was higher: 61% in 2011, compared to 40% in 2010.
Additionally, increasing numbers of younger drivers are replacing car trips with online socializing. Further, the rapid adoption of mobile technology is having a significant impact. Mobile represents 58% of all ZipCar reservation activity in 2012, she said.
Effgen said that ZipCar had handled 4 million reservations in 2011, and that 10 million drivers live within 10 minutes of a ZipCar. Compared to the average 19% of a household budget spent on transportation, “Zipsters” (ZipCar users) spend about 6%, she said.
In addition to exploring new business models for mature markets, Ford, as other automotive OEMs, is busy developing new vehicle technology for driver-assistance, increased safety, and connectivity, with an ultimate goal of realizing safer, more efficient automotive transportation (V2V, V2I).
Emerging markets. Tackling emerging markets poses a somewhat different challenge, due, among other things, to rapid population growth and different densities. By 2050, more than two-thirds of the world’s population is expected to live in cities; 50 of those cities may have more than 10 million people. Africa and Asia together will account for 86% of that urban population growth. In addition, by that time, it is projected that there will be more people older than 60 than under 16 worldwide—already true in the developed nations today.
|Urban density maps. Source: Ford. Click to enlarge.|
The big challenge in addressing emerging markets, said David Berdish, Ford’s Manager of Social Sustainability during the Go Further with Ford event, is trying to understand the specific urban eco-systems.
Cities have their own types of ecosystems and their own infrastructure, their relationships, their citizens. If Ford wants to be part of the ecosystem, we have to have a better understanding of it. It’s either municipality-driven or institution-driven or driven by other areas, other parts, and you try to figure how you fit in.
Within trying to fit in the system, we’re trying to understand where the needs are, what the constraints are, how big a role can Ford play, or where can Ford play without being a traditional car company that jams our cars and trucks down peoples’ throats.—David Berdish
Kristin Schondorf of Ford’s Research and Advanced Engineering Group is now the Global Project Manager, Future of Mobility Research, and as such is the dedicated global lead to defining Ford’s overall vision on the future of mobility—including these emerging markets.
The first thing we did as team was to define what really is mobility. We defined it as accessibility for people, goods, and services to go efficiently, affordably and safely. Looking into these new models is key. We broke it into the three big areas—we have the new business model element, vehicle concepts, and new technology to support the visions.
I look at that [picture of Mumbai, India] as a huge opportunity. We want to go to a fully connected multi-modal network.—Kristin Schondorf
The Ford team will begin fleshing out their Blueprint for Mobility later this year.
Other approaches: Renault MOBILIZ
Ford is not alone in trying to figure out how to address the changing markets for mobility. Renault has launched MOBILIZ, the first social business initiative in mobility from a French carmaker. The program aims to restore the autonomy of people with low incomes. More than eight million people living under the poverty line in France are barred from fully entering society and the professional world through their inability to get around or acquire and maintain a vehicle, the company said.
Initially launched for France, MOBILIZ is based on three main components: real-life mobility service solutions; the creation of an investment company to finance mobility projects; and a partnership with the “Enterprise and Poverty” Chair at HEC Paris. MOBILIZ will:
Support the development of new mobility platforms run by the Voiture & co organization: services will include a diagnosis of individuals’ mobility needs and a range of needs-adapted solutions, including carpooling, micro-community transport, €5-a-day car hire, and support in obtaining a driver’s permit. Since 2007, seven Voiture & co mobility platforms have helped 52% of beneficiaries to find a job again, according to Renault.
Propose car repair prices adapted to people with low incomes at volunteer Renault garages (agents, dealerships) called “Socially Responsible Renault Garages”. The idea is to bring the service and reception quality of the Renault network to beneficiary customers as identified by the social services. This original offering is the result of joint efforts by Renault and participating Renault garages.
Finance organizations and companies developing innovative mobility solutions for people in social and financial difficulty through the creation of an investment company called MOBILIZ Invest s.a.s. Launched with an investment budget of €5 million provided by Renault, MOBILIZ Invest s.a.s. could be opened to external investors in line with identified synergies. Based on the social business principle, aimed at maximizing social impact, any profits will be reinvested in other projects on community-minded mobility rather than being paid out as dividends.
Foster knowledge sharing and dialog on social business projects with players from civil society, public authorities and other companies committed to this approach, with Renault becoming the third partner of the “Enterprise and Poverty” Social Business Chair at HEC Paris, alongside Danone and Schneider Electric. The partnership will also enable the Group to benefit from advice from experts in the field, including Muhammad Yunus, 2006 Nobel Peace Prize winner for micro-credit, and Martin Hirsch, Chairman of the French Civic Service Agency and former High Commissioner of Active Solidarity.
[Ford hosted Green Car Congress at the Go Further with Ford event.]