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Ford-owned Chariot shuttle service to close

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Ford-owned Chariot shuttle service to close

January 10, 2019 05:00 PM updated 13 hours ago

Chariot, a Silicon Valley-based shuttle service that Ford Motor Co. bought to be a key cog in its mobility future, is closing.

Dan Grossman, the company's CEO, said in a blog post Thursday that after "significant consideration," the company has decided to shut down by the end of March.

"In today's mobility landscape, the wants and needs of customers and cities are changing rapidly," Grossman wrote. "We apologize for the inconvenience this may cause Chariot's riders and our enterprise customers. We are committed to ensuring our customers are aware of the decision and have time to make alternative transportation arrangements."

He did not give a specific reason for the closure. A Ford spokesperson was not immediately available for comment.

Chariot, which ferries passengers in Ford Transit vans, was among the first big bets placed by Jim Hackett in 2016, when he was chairman of the automaker's Smart Mobility subsidiary before becoming Ford CEO the following year. Ford paid roughly $65 million for the company, according to reports. After the acquisition, Ford expanded the San Francisco service to Austin, Texas; New York; Seattle; Detroit; and the United Kingdom. But in August 2018, Streetsblog NYC branded the service "a big, expensive failure," using company-provided data to show that each of its vans in New York were averaging just five riders per day.

Chariot was founded in 2014. In Thursday's closure announcement, Grossman — who was previously COO of General Motors' Maven peer-to-peer car-sharing service — said Chariot had delivered more than 3 million rides since its inception.

"We helped Ford build their mobility business, and their experience with Chariot continues to inform their mobility efforts and design decisions for the future," he said.

 

Since becoming Ford's top executive in May 2017, Hackett has preached the need to develop "smart cities" with vehicles and other forms of transportation that can cheaply and quickly carry around passengers and goods.

Ford also has invested in bicycle-sharing and electric scooter companies.

 

If Hackett was wrong about this, he could also be wrong about other bets on  future opportunities....

 

 

 

 

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2 hours ago, jpd80 said:

 

If Hackett was wrong about this, he could also be wrong about other bets on  future opportunities...

I don't think Ford wrong to acquire Chariot in September 2016. It's one of the few things that Mark Fields did right before he was fired. At the same time, Ford isn't wrong to shut it down in March 2019. As mentioned in the Chariot blog post, they helped Ford expand its mobility services business. The market for mobility services is very dynamic. It's important for Ford to adapt to changes in the market. Looks like they're doing that.

Ford can apply what they learned with Chariot for new mobility services in the future. They should have lots of data from owning Chariot for the past couple years.

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7 minutes ago, rperez817 said:

Ford can apply what they learned with Chariot for new mobility services in the future. They should have lots of data from owning Chariot for the past couple years.

The only question that would remain would be if all that data was worth the $65 million.....

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35 minutes ago, twintornados said:

The only question that would remain would be if all that data was worth the $65 million.....

That's not that much if that saves them time and gives them data the data that helps with the business. Knowledge acquisition.

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13 hours ago, akirby said:

Probably didn't have the profit margins to fit Hackett's overall plan.

I question if any of those types of services are profitable at all right now. I'm not even sure they can be as they’re set up currently. 

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14 hours ago, rperez817 said:

I don't think Ford wrong to acquire Chariot in September 2016. It's one of the few things that Mark Fields did right before he was fired.

Jim Hackett bought it before he was CEO and still managing the Ford Mobility division

Quote

 

At the same time, Ford isn't wrong to shut it down in March 2019. As mentioned in the Chariot blog post, they helped Ford expand its mobility services business. The market for mobility services is very dynamic. It's important for Ford to adapt to changes in the market. Looks like they're doing that.

Ford can apply what they learned with Chariot for new mobility services in the future. They should have lots of data from owning Chariot for the past couple years

 

This venture cost Ford a bundle, they purchased it and expanded it to multiple cities before realizing that it was a bust.  What part of that advances their mobility business?

If anything, this business venture showed them what not to do, assume that people would take up a ride share company when there are already established players in the market....I won't even start on bicycles..

 

 

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1 hour ago, jpd80 said:

This venture cost Ford a bundle, they purchased it and expanded it to multiple cities before realizing that it was a bust.  What part of that advances their mobility business?

In science and engineering, you almost always learn more from your failures than you do from your successes. It's only a failure if you don't learn something from it.

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9 hours ago, SoonerLS said:

In science and engineering, you almost always learn more from your failures than you do from your successes. It's only a failure if you don't learn something from it.

There wasn’t much science and engineering involved here - just a bad business decision on a questionable at best concept. The mobility business is a big money pit of losses. Ford is foolishly chasing this with funds needed for future product development. One reason investors are concerned about the company.

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2 hours ago, Trader 10 said:

There wasn’t much science and engineering involved here - just a bad business decision on a questionable at best concept. The mobility business is a big money pit of losses. Ford is foolishly chasing this with funds needed for future product development. One reason investors are concerned about the company.

That's also why they've backed off the pie in the sky stuff. The narrative has changed across the industry, just look at how quiet CES was this year on the autonomous technology front. 

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2 hours ago, Trader 10 said:

There wasn’t much science and engineering involved here - just a bad business decision on a questionable at best concept. The mobility business is a big money pit of losses. Ford is foolishly chasing this with funds needed for future product development. One reason investors are concerned about the company.

Bill Ford has said that some of Ford's forays in Auto 2.0 may fail, and that their OK wth that.  Read Sooner's post above.

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36 minutes ago, coupe3w said:

Will Spin the scooter-sharing company Ford bought in November 2018 be next?

Probably. That scooter trend is a total fad that will not last

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3 hours ago, Assimilator said:

Ford doesn't seem to realize just how predictable their cycles of spending and cutting are.  

Hackett is the new Nasser, he inherited a king's ransom of cash and went off buying up companies in the hope of diversifying Ford's income.

My Fear is that Hackett is getting all these bird brained ideas from Bill Ford who let's face it, couldn't run a cake stall. Autonomous vehicles have now shifted form being a thing of driverless hail rides to driver-less commercial delivery vehicles, the game plan has been changes to fit the dialogue of guaranteed monthly income over just the profit from one vehicle sale.....that only works if the fleet buyer sees real benefit in AV and connectivity. My guess is that Ford is already late to the table on this and like Chariot, end up with another white elephant that will be written off as a loss. Connectivity supplied by others is already making those businesses more efficient.

Edited by jpd80

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I'm not sure why any automaker would want to get into the service side of "smart mobility". It seems like it will only take away resources from R&D.

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It’s called diversification.  It has the potential for recurring profit every month that is somewhat immune to the ups and downs of the car market.  It will help them sell more autonomous vehicles.  If AVs for commercial deliveries take off they’ll be way ahead of the game and Hackett will look like a Genius.  It’s a gamble but I think it’s a good gamble at this point.

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Ford sees growth in the automotive industry as unsustainable and that there is a coming inflection point where people can't afford cars or don't want cars and technology or innovative businesses will find a solution around it (with or without the mainstream industry participating).  Ford wants to find their place in that future before they become the low margin commodity supplier.  I think it's a good thing we see a Ford this pro-active.  

Edited by Assimilator

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Some sure-fire bets would be: farm tractors (we all need to eat), class 8 trucks (as in dump trucks/construction vehicles), trains and buses (if mass transit really takes off).  Not scooters, bikes, shuttle services!!!  Autonomous vehicles?  If you can show me an AV navigating Connecticut's highway traffic standstills, potholes and all around moronic drivers, then I'll buy it.  Otherwise forget it!  They might work in Nebraska, but not in New England!

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3 hours ago, Assimilator said:

Ford sees growth in the automotive industry as unsustainable and that there is a coming inflection point where people can't afford cars or don't want cars and technology or innovative businesses will find a solution around it (with or without the mainstream industry participating).  Ford wants to find their place in that future before they become the low margin commodity supplier.  I think it's a good thing we see a Ford this pro-active.  

I'm not sure, it's like the house is burning down and Hackett is outside pruning the roses..

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On 1/12/2019 at 2:07 PM, coupe3w said:

Will Spin the scooter-sharing company Ford bought in November 2018 be next?

Well Bike deal beat Scooters!

Ford ditches GoBike deal

Ford is ending its sponsorship of a Lyft-owned bike-sharing service in San Francisco, reports Axios.

In the deal, “part of a larger effort … to transform [Ford] into more than just a carmaker,” bike-share operator Motivate’s bikes were branded as Ford GoBikes.

No reason was given for the unwind on Ford’s behalf; the car company is still involved in a scooter rental startup.

.

Photo 4a.jpg

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6 hours ago, Assimilator said:

 Ford wants to find their place in that future before they become the low margin commodity supplier.  I think it's a good thing we see a Ford this pro-active.  

Yes sir. As Ford finds its place in an industry that's moving toward mobility services, electrification, and autonomous vehicles, there will be some experimentation involved. As I mentioned earlier, this market is very dynamic. As Ford winds down Chariot and GoBike sponsorship, I'm sure they will investigate new and different mobility services offerings.

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One thing   Fleet managers are good at is working out what’s not cost effective, an AV plus connectivity charges each month sounds great but may wind up costing a packet more than  conventional fleet and human drivers. Plus the cost of switching back if it fails.

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