Ford is Disrupting the Mobility Industry Once Again
Nobody called Henry Ford a “technology innovator” when he started tinkering in his backyard shed more than a century ago. But his inventive approach eerily matches our modern notions of disruption, which he applied with full force to how we get around, the way we manufacture products, and how we spend an average workday. When the Model T rolled out of that shed in 1908, many accepted notions in the nascent automotive industry went out the door. (See: moving assembly line and $5 daily wage.) Mr. Ford, and the company brand adopted the Blue Oval logo as early as 1912, were in effect the creators of modern mobility in the 20th century. So, which company will play the same role in the next century?
Surprise: Brand attributes can be surprisingly resilient. Recent signs suggest that Ford could play a similar role in disrupting mobility for the 21st century.
While recently formed electric vehicle companies and similar firms working on autonomous vehicles, ridesharing apps, and shared scooters have garnered most of the attention in recent years, Ford has been accelerating its shift from legacy carmaker to an iconoclastic provider mobility services. It’s been nearly three years since the company announced the introduction of its Smart Mobility services at the 2016 Detroit Auto Show. Ford also opened its Research and Innovation Center in techie Palo Alto and then purchased a portfolio of companies that offer everything from dynamic shuttles to car-subscription services.
It’s a bold vision that most recently saw Ford announce that it was phasing out nearly all of its passenger cars to shift its focus on crossover and pickups—vehicles increasingly powered by batteries and capable of autonomous driving. Back in 2016, Ken Washington, Ford’s chief technology officer, told me, “We’re at an inflection point where technology is making things possible that weren’t possible before.” Three years past that inflection point, Ford is accelerating its efforts in mobility services, most recently acquiring Spin, the electric scooter company, last month.
Ford’s good old days of innovation
Students of history will not be surprised that Ford is tinkering with its current business model. That’s exactly what Henry Ford was doing when, working from his storage shed, he started building his so-called Quadricycle. That contraption consisted of two bicycles placed side-by-side with a gasoline engine bolted on to provide motivation. It looked crazy. True invention always requires that some people will think you’re mad to shake up the existing order—just as Ford’s contemporaries thought the idea of supplanting the horse and buggy was a fool’s errand.
But the right ideas coming along at the right time have a way of taking hold. The Quadricycle would eventually evolve into the Model T. Soon after it was introduced in 1908, it became so popular that Ford had to reinvent how it was produced to keep up with demand. That gave birth to the moving assembly line—allowing Ford to reduce the amount of time to build a car from more than 12 hours to about 90 minutes. While the assembly line became common practice and remains so today, bold brands fully understand that not every innovation will make sense in the long run. In early examples of Ford offering short-lived services, the company once operated a mail route and an air-transportation service.
Fortunately, the Ford Motor Co. never lost sight of its core mission of providing accessible transportation to the masses. Henry Ford famously and accurately predicted that the Model T would be “so low in price that no man making a good salary will be unable to own one.” In the following two decades, Ford in fact produced more than 16 million units, bringing the Model T to nearly every continent on earth.
10 million vehicles, three times
Two other Ford vehicles would go on to sell more than 10 million units. The Ford F-Series pickup truck was introduced in 1948. It evolved from a basic, rugged work truck for the farm to a portfolio of stylish and comfortable lifestyle vehicles at home in the country as well as the suburbs. There are luxury, high-performance, and off-road versions. The Ford F-Series has been the best-selling pickup in the United States since 1977 and the most popular vehicle in America since 1986. Ford will continue to evolve the F-Series when it debuts a fuel-sipping gas-electric hybrid version of the pickup in 2020. (The company introduced the first hybrid SUV in 2005.)
As vastly popular as the F-150 continues to be, the Ford car that arguably deserves the most prominent place in American history is the Mustang. Like its mega-hit predecessors, few onlookers expected the Ford Mustang to become an icon when it debuted at the 1964 World’s Fair in New York City. The young Lee Iacocca gambled that consumers would want a new kind of affordable sports car—and it paid off. More than 400,000 units sold in the first year.
The Mustang’s rise to mega-celebrity status took place when it starred alongside Steve McQueen in “Bullitt,” the 1968 thriller. The Mustang’s popularity proved that the rising ranks of Baby Boomers wanted an affordable yet sleek sports car. The small, sporty model with a long hood and short rear deck took on the Corvette while spawning competition from the likes of the Pontiac Firebird, Plymouth Barracuda, and Ford’s own Mercury Cougar.
More than a half-century later, in August 2018, Ford announced that the Mustang became the company’s third vehicle in the company’s history to exceed lifetime sales of 10 million units. Moreover, the Mustang’s wild spirit is being used to inspire Ford engineers working now on the next generation of automotive technology. Ford is saying that its first long-distance all-electric vehicle will be inspired by the Mustang’s design.
When Ford announced in 2018 that it would discontinue almost all its domestic passenger cars—part of its shift to electrifications and mobility services—Jim Farley, Ford’s president of global markets, said the Mustang would not be touched. He called the car, “the heart and soul of this company.”
Ford’s acquisition of Chariot, the start-up provider of dynamic shuttle services, promoted Harvard Business Review to identify the principles guiding the brand to move into mobility services. The first big idea is: “Be ambitious but start small.” The business publication pointed to a prime example in the form of Chariot, which put a small fleet of 14-passenger vans equipped with Wi-Fi, extra storage, and electrical outlets on San Francisco streets lacking adequate public transportation. Like the early response to the Model T, F-Series trucks and Mustang pony car, Chariot was first viewed with curiosity but then quickly grew—now managing more than 200 vehicles in markets across the United States and Europe.
Of course, long-term success is not guaranteed with any of Ford’s new directions—whether it’s shared bicycles, a parking reservation system, or the opening storefront retail experiences. That’s okay. Innovative companies often develop a portfolio of business models to see which ones work.
In fall 2017, Ford launched Ford Team Edison, a downtown Detroit train station landmark remade into Ford’s nerve center for autonomous and electric technologies. Darren Palmer, the global product development director at Team Edison, said, “To be successful, this new team had to be willing to challenge every truth and every process we had developed over the course of our careers.”
In one of its boldest moves—one that pays homage to the brand’s heritage while redefining it in the new era of mobility services—Ford in 2017 acquired the San Francisco-based Canvas car subscription service. Canvas is a compelling alternative to car ownership, part of the major economic shift from ownership to access. Think of it as the automotive equivalent of Airbnb, Uber, streaming media services, and the likes of Rent-a-Runway, which offers rentals of designer dresses and other high-end apparel. Canvas does the same thing with Ford vehicles, giving the American consumers access to a car in an all-in-one monthly subscription.
Car buyers often don’t consider the full cost of vehicle ownership, including financing, maintenance, and roadside assistance. Canvas rolls those costs into one package, starting below $400 a month. The subscription model provides unprecedented freedom to drive the cars you want when you want them, and without the economic burdens associated with conventional ownership — especially depreciation, the biggest line item for the total cost of ownership. The company now has more than 1,000 customers in the San Francisco Bay area and Los Angeles.
Again, the point is not that any of these technologies and connected services—from robotaxis and dynamic shuttles to AI-powered routing and shared electric scooters—will change the world overnight. (By the way, Ford acquired the ultra-popular Spin scooter service last month.)
The idea for mobility start-ups and legacy automakers alike is to imbue their brands with a spirit of innovation and dedication to affordable transportation—just as Henry Ford endeavored to do in his workshop more than a century ago. When that happens, anything is possible.