Ford Creates New Subsidiary for SmartMobility

Ford, one of the leading automotive firms in the world has created a new subsidiary named Ford Smart Mobility for developing alternative solutions to traditional car ownership.The Ford Model T was the first mass-produced vehicle. With Ford Smart Mobility, the company is seeking to position itself as market leader in the emerging field of alternative mobility solutions. The new subsidiary will serve as an incubator for exploring alternatives like fractional car ownership and ride sharing.

Ken Washington, Ford’s vice president of research and advanced engineering, said that though many other companies have created many new brands and separate companies to develop alternative mobility solutions, Ford wanted to do this within the boundaries of the current company while putting into place an innovation ecosystem.

In January 2015, at the CES Show, Ford had announced its Smart Mobility plan. As part of this plan, over 30 pilot projects and experiments were conducted across the globe in relation to mobility. It became progressively clear that it made more sense to spin off a separate company to investigate different mobility solutions, just like Google formed Alphabet to deal with the development of autonomous cars and other projects which would not yield immediate returns. Thus Ford Smart Mobility will function as a separate but connected company. The link with Ford will help the company to channel insights from its projects to benefit customers of the company’s core business.

Ford had conducted a Dynamic Shuttle pilot program in London last year and had expanded testing of this program in its Dearborn, Michigan campus after receiving highly positive feedback for this program. This could possibly be the first project the new company takes up. It combines the use of personal vehicles and public transportation in a ride-hailing format to make life easier for commuters.

According to Washington, the project proved that if an efficient shuttle could be strategically routed while providing users with adequate space and a comfortable ride, it would become highly popular.

He added, “That research was loud and clear. … The results so far are pretty promising and telling us there’s an exciting potential business that we could potentially take to multiple cities and introduce at some scale.”

The Ford Smart Mobility company will be headquartered in Dearborn, Michigan and will work in close collaboration with Ford’s Research and Innovation Center in Palo Alto, California, which works on innovations in self-driving cars, mobility and connected cars.

While the development of self-driving cars will remain under the purview of the main Ford company, the Smart Mobility will be able to benefit from the inflow of technology and insights acquired during this process, especially when it comes to ride-sharing platforms.

“It’s not clear how profitable or sustainable a business could be if you have drivers in the loop,” he said. “If you just extrapolate the volume of need as cities grow and reach congested levels of 1 to 10 million people and beyond, the demand for ride-service vehicles and flexible ownership could pretty easily outstrip the availability of drivers. So it’s unclear to us if it’s a sustainable model with a driver. But we’re not dismissing that either.”