Ford Working With Cities to Ease Congestion by Bike, Shuttle

(Bloomberg) -- Ford Motor Co. said it’s buying a shuttle company in San Francisco as part of its first step in establishing relationships with major global cities to help ease congestion with mobility services such as bikes and commuter vans.

Ford said it’s acquiring the Chariot shuttle service for an undisclosed sum and collaborating with bike-sharing provider Motivate in San Francisco, San Jose and the East Bay. Each will help fill a gap between taxi and bus services by providing inexpensive, on-demand transportation, Ford officials said in an event Friday in front of San Francisco’s City Hall.

“We are in the midst of a transformational moment in the history of transportation,” Chief Executive Officer Mark Fields said at the event. “Ford is not just an automaker. We are a mobility company, and we are expanding our entire business to focus on both of those things.”

The second-largest U.S. automaker is embracing changes that are roiling the transportation industry as more commuters use ride-hailing service such as Uber and with self-driving cars expected to hit the roads within five years. The company is racing other major automakers and tech giants like Alphabet Inc.’s Google car to go driverless to increase safety and reduce traffic congestion as 60 percent of the world’s population moves to urban centers by 2030.

Last month, Fields said Ford would have driverless taxis -- with no steering wheel, accelerator or brake pedals -- on the road by 2021. Neither that announcement nor Friday’s managed to boost Ford’s stock, which has fallen about 11 percent this year. The shares declined 2.4 percent to $12.43 at 3:33 p.m. in New York, as the broader markets also dropped.

“We don’t manage the business for day-to-day stock changes,” Fields said today in a Bloomberg Television interview.

‘Net Positive’

Ford is reworking its business model to prepare for a day when fewer people buy cars, Fields said.

“If there’s going to be more shared vehicles, that could have a business impact on us,” he said in an interview. “So we’re saying, ‘How do we meet where the customer is going, but also figure out a business opportunity that could actually be a net positive for the company even through we may sell less vehicles?’”

Jim Hackett, a former board member of the Dearborn, Michigan-based automaker who now heads its new Ford Smart Mobility unit, said expanding into new modes of transportation will provide a new revenue source.

“Cities globally are dealing with increased congestion, a growing middle class and environmental issues,” Hackett said in the statement. “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.”

Expansion Plan

Ford said the Chariot shuttle service will expand to at least five more cities in the next 18 months. It operates nearly 100 Ford Transit vans along 28 routes in the San Francisco area. Riders now hail the vans, but Ford said it’s developing software to “map efficient routes” to reach commuters in real-time.

Ford said it will expand Motivate’s network in the San Francisco area to 7,000 bikes, a 10-fold increase, by the end of 2018.

“We’re going to see bikes reproducing like bunnies all around the Bay Area,” San Jose Mayor Sam Liccardo said. “We embrace Silicon Valley technology, but sometimes old technology is the best.”

To contact the reporters on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net, Dana Hull in San Francisco at dhull12@bloomberg.net. To contact the editors responsible for this story: Kevin Miller at kmiller@bloomberg.net, John Lear, David Welch