Ford CEO: Ride-hailing apps forced us to rethink business model

Ford CEO: Ride-hailing apps forced us to rethink business model
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The emergence of ride-hailing and ride-sharing apps forced Ford Motor Co. to rethink its entire business model, according to its chief executive officer.

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Ford CEO Mark Fields said Monday that the automaker is no longer solely focused on how many vehicles it can sell. Instead, Ford is increasingly focused on what other mobility services it can provide, such as ride-hailing, bike-sharing and shuttle services.

“The world has moved from just owning vehicles, to owning them and sharing them, and this is causing us to think very differently as a company,” Fields said during a conference from the company’s headquarters in Dearborn, Mich. “This is what is driving us to rethink our entire business model.”

The backbone of the company’s new strategy entails building a fully driverless car – without pedals or a steering wheel – to be used for commercial ride-hailing and on-demand taxi services by 2021.

To fortify its efforts, Ford is working with several autonomous technology start-ups, doubling its Silicon Valley team and more than doubling its research and innovation center in Palo Alto.

A number of other automakers have also jumped into the ride-hailing space. Volvo will be a key partner in Uber’s mission to offer semi-autonomous rides to passengers in Pittsburgh beginning this week. And General Motors, which invested $500 million in Lyft earlier this year, will begin testing autonomous vehicles with passengers by next year.

The widespread use of ride-hailing apps could hinder the sale of new vehicles, intensifying concerns over a recent trend that shows auto sales have begun to slip after a strong period of growth. 

Fields, however, points out that vehicles used for ride-hailing services could rack up miles “four or five times” faster than a normal automobile.

“That will mean more replacement,” he said.

Ford will first focus on driverless cars for commercial purposes, but it could start selling autonomous vehicles to the public by 2025, Fields said.

“We believe the next decade is going to be defined by the automation of the automobile,” Fields said. “We’re dedicated to putting autonomous vehicles on the road for millions of people, not just those who can afford luxury cars.”

The company also is planning to launch a bike-sharing program and shuttle service to help expand the reach of mass transit in big cities.

Ford will “partner with global cities to solve congestion issues and help people move more easily, both today and in the future,” Fields said.