Ford’s shared mobility ambitions for India a curveball for Ola, Uber?

Sunny Sen October 13, 2017 7 min

US automaker Ford Motor Company wants to power its fortunes ahead in shared mobility in India to stay relevant in a growth market where value is increasingly being harvested by cab-hailing companies such as Ola and Uber.

That drive is also fueled by Ford’s ambition to garner large swathes of traffic data that will help it understand consumer preferences and meet their transport needs better.

This is part of Ford’s push worldwide that has seen an investment in US ride-hailing company Lyft, the launch of a shuttle service Chariot and a micro-transit hospital transportation service, and a driverless pizza delivery pilot with Domino’s. All this is in the US and with some 250 million people projected to migrate to cities in India from its hinterland by 2030, the time may be right to bet on mobility in Asia’s third largest economy.

Ford’s mobility efforts, as per information available now, may not directly affect Ola and Uber’s business models in India but could have interesting adjacency effects. This story details how.

The biggest question for Ford, says the executive leading its mobility efforts, was whether it would supply cars at the same rate as it has in the last 50 years or at a different rate? “I think at a different rate,” said Raj Rao, CEO of Ford Smart Mobility LLC, in an interview. “How to give shared rides instead of individual rides, and it is not only about personal mobility, but also how to use it to fetch goods.”

Rao took over from Jim Hackett, who chaired Ford Smart Mobility before becoming Ford’s president and CEO. The mobility unit was created in previous CEO Mark Fields’s tenure to accelerate Ford’s plans to design, build, grow and invest in emerging mobility services that would shape the future of the company.

Wheels no longer posh

Rao said that Ford doesn’t subscribe to the notion of “peak car” — something that Uber subscribes to. “It’s not that people will completely stop buying cars,” he said.

Still, trends suggest that a car isn’t the status symbol that it used to be a couple of decades ago. “That is not as universal as it once was, though it exists for some people,” Sheryl Connely, manager, global consumer trends and futuring at Ford told FactorDaily. “…some people would require it when they want to go from point A to B, something like a functional utility.”

Connely’s job is to look outside the auto industry, site trends and make them useful for Ford to develop strategy on future of mobility.

But, isn’t that an area that is dominated by Ola and Uber?

The Indian born CEO of Ford Smart Mobility, Raj Rao, believes Indians are ready for fractional ownership of cars

Ford in August 2016, invested in $24 million in Zoomcar, a self-drive car company in India. “We are getting cities to embrace shared mobility,” said Rao, adding that a lot of people are prepared to share their vehicles. “They are ready for fractional ownership.”

To give an example, if the person is not using the vehicles from 10am to 2pm, he doesn’t mind if someone else uses it, as long as the person who is sharing the vehicle doesn’t damage it. Rao saw it coming with the growth of Netflix, which is about consuming content via streaming, or Airbnb when people started opening up their home as an alternative to stay in hotels, and when Uber started Pool, which was about sharing rides.

Sharing vehicles is the step in evolution of sharing rides. “If everyone did that, that would reduce congestion on the roads,” Rao said. (India’s top planning body NITI Aayog has suggested that cab-hailing platforms be allowed to enrol private cars to offer shared rides but this is being resisted by the central transport ministry.)

Zipcar clones the future?

To do that, Ford would need to create an hyperlocal distribution model – which is where Zoomcar comes in. “It is about how do you create an asset and manage the cost of ownership,” said Greg Moran, CEO and cofounder of Zoomcar.

It is like creating a marketplace of cars. Whenever the vehicle is not in use it can be rented out to a person who needs it. If there is an accident, Zoomcar will take care of the insurance processing and repairs. Moran said that the demand for sharing will grow as supply constraints keep growing in major cities. “We will transition into a complete marketplace, which is 20% the business right now,” he added.

Zoomcar is not the only one with the idea, to be sure. Competitor Revv is building technology that will allow users to hire a car, unlock it, and drive it away without any human interaction. “People are willing to share assets not space,” said Anupam Agarwal, cofounder and CEO of Revv.

Indian shared mobility companies

If they can crack this business model in India, Zoomcar and Revv will be taking forward in India what US car-sharing company Zipcar started in 2000. It offers cars on rent for a monthly, quarterly and annual subscription. Zipcar, which is owned by Avis Budget group operates from 11,000 rental locations in 180 countries, and posted $2.2 billion in revenue in the second quarter of 2017.

Ford does not want to directly compete with Ola (which has 60% market share) and Uber (most of the rest 40%), but if Zoomcar, which currently operates in 26 Indian cities, scales its business, that will impact the taxi-hailing business. Throw in, Ford’s manufacturing business – and, it will have an advantage there.

In the past 12 months, the number of rides for Zoomcar has grown four times; the company doesn’t reveal absolute figures. Ford looks at Zoomcar as its shared mobility partner, through which more people will drive Ford vehicles though it can procure cars from other carmakers, too.

It is not just about sharing cars, Ford is starting a shuttle service for its employees in Chennai much like its Chariot service in San Francisco and New York. “Then we will open up to other parts of the cities, in areas of first mile-last mile (mobility), and yet that is scalable,” said Rao.

Ford’s big data map

One area where Ford is actively working is collecting data around traffic movement, population density and from where to where people travel. Then the company wants to analyse this data to offer newer solutions. “The idea is to use data and analytics to do route planning. Use data to study journey. You have to connect more pieces, and see which all places need to be connected,” said Rao.

An easy example it to collect data of a new business district or a new business park — and then help people with transport solutions using analytics depending on where they are going to or coming from.

But before Ford can do this and offer a solution, say, through an app it needs to collect a lot of data. “We are in the early stage of setting up that stage for mobility, because we need the cities to be ready,” said Rao.

Zoomcar CEO Greg Moran says the number of rides on his platform in the last 12 months has grown four times

Ford will have a lot of catching up to do. Uber, which perhaps knows more about the world’s top cities than the city administrations themselves, is looking to offer traffic data on Boston to the local government to ease congestion on roads.

To begin with, Ford wants to prescribe journeys. For example, if you are in Chittaranjan Park in New Delhi and want to go the the bustling market of Karol Bagh for your Diwali shopping, it can a stressful experience getting there using an auto or cab and a metro and, perhaps, a cycle rickshaw.

“We can prescribe the journey, book tickets on the commuters’ behalf, book the transit pass, and be more prescriptive about the journey,” Rao said. “We are looking at different transit – you want to use the metro, to reach to the metro you might need and auto or share a taxi. Instead of you booking an Uber, or book the metro ticket, you will have a single journey plan.”

This cannot be done if Ford doesn’t have data of auto, taxis, buses, metros and all other forms of transportation. The technology work on this is being led by Ford’s Greenfield Labs in Palo Alto, California.


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