Nov 15, 2018
Here’s What It Takes to Build a Self-Driving Business — And Where We Stand Today
By Sherif Marakby, CEO, Ford Autonomous Vehicles LLC
When discussing self-driving cars, the question that most often comes up is about when they will take to the streets. While that is important, there’s so much required for wide-scale deployment beyond just having the self-driving vehicle itself.
Aside from delivering safe and reliable technology, what does it take to operate a successful self-driving vehicle service, especially one that customers want to use and makes their lives better? And one that is a profitable business that also benefits the community?
These aren’t questions we’re willing to put off until some later date. In fact, we’ve been thinking about them for a long time. We want our self-driving vehicles to solve real-world problems with levels of accessibility, affordability and convenience that aren’t possible now.
Self-driving vehicles are simply an enabler for a new kind of business we’re building at Ford. We are already designing, testing and operating an ecosystem of services today that is required for our self-driving business in the future — building the capabilities that will make scaling our business and delivering sustainable revenue streams much easier in the future.
We believe a successful self-driving services business is built around the principles of supply, operations, and demand. Seems fairly obvious, but the devil is in executing the details. For supply, we need access to vehicles and self-driving technology. Then there’s operations, which doesn’t get a lot of attention compared with the intriguing story of self-driving technology development, but it’s what will make the difference in a running a viable business. And of course, customers are the source of demand, so we need to identify where customers are that can be served by our business.
These foundational elements are crucial for any viable self-driving service, and we’re tackling each one now, in unison, so we are ready to activate a commercial service with solid business fundamentals.
Let’s take a look at what we’re doing in these key areas:
“Supply”
The Vehicle — Simply put: We know a thing or two about making cars. As we explained before, our strength is optimizing self-driving vehicles to help meet the needs of people and businesses. This includes making sure they’re durable enough to handle tough urban environments, making use of hybrid-electric technology to maximize their use, and ensuring they are integrated for safety from the outset. Our advantage is that we can engineer and manufacture custom-designed and purpose-built vehicles. Self-driving services, whether ride-hailing or goods delivery, are all new, so we need to design for the future, versus just repurposing what’s on the road today.
Self-Driving System — Of course, a self-driving vehicle has to know how to drive. We’re working closely with our partners at Argo AI to develop the brains behind our self-driving vehicles. This relationship features deep integration across all areas, including hardware and software teams. The software team at Argo AI works directly with the chassis and powertrain teams at Ford to gain a thorough understanding of vehicle dynamics, to help improve controls and ensure the sensors have automotive grade durability and reliability.
In addition to having an in-house mapping team that can scale properly as more vehicles are deployed, Argo is sharply focused on developing vehicles that seamlessly blend in with traffic and drive naturally based on the unique road user behavior in each city. Using advanced algorithms that make informed predictions about what they see in the environment, our self-driving vehicles will be able to quickly make the proper, subtle adjustments needed to provide people with a smooth ride that is comfortable and confidence-inspiring.
“Operations”
Fleet Management — Managing all of these self-driving vehicles is going to be crucial once they are ready for prime time. We’ve been working with fleet owners and operators since the early days of our company, and this year we took that experience and launched Ford Commercial Solutions (FCS) to help other businesses manage their fleets by providing connected vehicle data, like fuel efficiency and other diagnostics, to improve operational effectiveness. FCS is also going to be critical in helping us manage our own fleets of self-driving vehicles.
To prepare for the future, FCS is already conducting fleet management for us in Miami and has modeled scaled self-driving vehicle operations in detail. Today, the team is using its software and supporting fleet management for services such as Chariot and GoRide. They are measuring and helping reduce idling time and inefficient harsh accelerations, as well as testing applications that can enable better downtime management and support within the Ford dealer network. Fleet management tools developed for law enforcement are also helping departments improve their situational awareness and driver behaviors.
Managing data and large fleets like these provides great insight that we will parlay into our self-driving fleet management operations. This includes a significant undertaking that involves choreographing all the necessary support jobs — such as routine maintenance, software updates, and parts procurement — into a comprehensive shop management system and network. Downtime is the enemy of a successful self-driving service. We want the fleet up and running to maximize the utilization of each vehicle, since this business is based on each mile driven, not every vehicle sold.
Transportation-as-a-Service Platform — Deploying self-driving vehicles in an efficient way will be especially important if we want to ensure they are serving a broad cross-section of people, including populations whose mobility needs aren’t currently met.
Fortunately, we know how to build operations that provide transportation as a service because we’re already doing it. Our Chariot ride sharing service is running in numerous cities, helping people fight congestion and get to work. Meanwhile, our GoRide ride-hailing business is serving major medical systems by helping the elderly, people with disabilities and those without easy access to transportation make it to their medical appointments on time.
With both of these services, we’re already managing and operating large fleets while directly solving real mobility challenges. Utilizing the Transportation Mobility Cloud developed by Autonomic, both Chariot and GoRide are also making use of sophisticated dynamic routing and booking software to optimize routing and efficiency — and this is software we’ll be able to take advantage of across a number of mobility services as we continue to improve it, including for our fleet of self-driving vehicles.
“Demand”
Moving People and Goods: The use of ride-hailing and goods delivery is growing due to the ease of smartphone apps and availability of internet connectivity. These are sectors where self-driving vehicles can help, so our demand strategy is to work with the leading companies that have built-in customer bases already utilizing these services.
Many companies want additional support in order to grow, such as Domino’s, which has an opportunity to deliver more pizzas but often can’t secure enough drivers. A self-driving service could supplement its business during those peak order times when it may be short on staff. Meanwhile, companies like Walmart are expanding by offering delivery services, and self-driving vehicles can enhance their ability to reach more customers. Finally, our self-driving service platform could provide solutions to small and medium-size businesses that may want to offer delivery, or currently do, but actually face a financial drain due to the resources involved.
As we’ve mentioned before, our self-driving vehicle service platform will be a far-reaching ecosystem that allows a variety of companies — from large to small — to tap into it to enhance their business. Our platform — fully supported by dynamic routing features and optimized dispatches — will be able to supply vehicles to support businesses during peak times, while any downtime in ride-hailing, for example, means vehicles would be free to support grocery orders or dry cleaning delivery.
We are teaming up with other businesses now to learn what’s needed to properly support them when we launch our self-driving service in 2021. Already, collaborations with Domino’s, Postmates, and multiple local businesses in Miami-Dade County have yielded valuable insight into how customers will interact with self-driving vehicles making deliveries, as well as how vehicles may need to be modified to accommodate multiple drop-offs. This effort is only going to get bigger as we collaborate with others.
Digital Services: As the need for driving is removed, there’s great opportunity to customize and personalize the ride-hailing experience inside the vehicle, especially with connected, digital services. Whether vehicles are used to haul a family, get employees to work, or take people out for a night on the town, there are a number of ways they can be modified to enhance the customer experience — and our goal is to give people the ability to spend their time doing the things they want.
A father picking up his daughter from school, for example, could use a self-driving vehicle to do so on his way home from work. Instead of driving, he could use the time in the car to order groceries for dinner and play educational games with his daughter. Commutes, meanwhile, can become more enjoyable and productive. People could order an autonomous vehicle from an app, order coffee from a recommended location along the way, and then have their ride stop to pick up their drink on the way to work.
Powered by the Transportation Mobility Cloud, our digital services will be able to provide a full experience inside the vehicle for riders — one that could even feature altered lighting and a customized atmosphere depending on people’s moods and preferences. We are beginning to explore collaborations across entertainment, audio, gaming, touring and commerce fields, so that we can build out an entire customer experience before, during and after their vehicle rides.
In addition to the three critical elements of supply, demand and operations, there are a couple other aspects to running a successful business that we think give us an advantage:
Cloud Services: Serving as the foundation connecting all of the capabilities required to run a self-driving service will be the Transportation Mobility Cloud that Autonomic has developed. With all these elements in operation, connectivity across the entire transportation system will be critical to operate effectively. For example, if a self-driving vehicle needs to be dispatched to a ride-hailing service, the fleet operators will need to know if it has enough range or fuel to complete the ride.
As an open, cloud-based platform that can connect app developers with connected vehicles, the TMC is able to effectively facilitate all of this information flow, offering a feedback system between apps, vehicles, and the services they’re supporting. Importantly, the TMC has the capacity to bring together different data streams — from connected vehicles, buses, scooters and other connected infrastructure — and ensure the transportation ecosystem at large is working optimally.
Right now, the TMC is already being used in a number of different Ford businesses, including GoRide and FCS, to optimize routing and gain telemetry feedback about fuel efficiency, vehicle health and driver behavior. In the future, with self-driving vehicles that are fully integrated, the TMC could also make it easy for developers to create apps allowing people to adjust entertainment and climate settings in their vehicle, process payments, and access location-based services.
City Relationships: No matter how much planning goes into creating a self-driving business, the fact remains that you won’t be able to simply copy and paste it from one city to another. Every city is different and constantly changing. That’s why we created the City Solutions team, which works directly with cities to understand what they need to help residents move more freely.
In Miami-Dade County and Washington, D.C., this team was critical to helping us understand how officials and communities want to see self-driving vehicles deployed and what issues they want addressed. Through programs like our City of Tomorrow Challenge, the City Solutions team also collaborates directly with cities to engage the community and identify their transportation concerns. Moving forward, they’ll help us deploy these vehicles in a way that’s safe and makes sense for each city we launch in.
Ford has deep experience building durable vehicles that serve large commercial fleets in heavy-duty, high-mileage operations; the kinds of vehicles you’ll want to outfit a self-driving vehicle business. The self-driving future requires that and more. So we are pulling together all the building blocks: our expertise as a global vehicle manufacturer, Argo AI’s work to develop state-of-the-art self-driving technology, our quickly advancing fleet management capabilities, routing systems and cloud services, and the partner networks needed to successfully run an autonomous business. When self-driving vehicles are ready for wide-scale deployment, you can bet that we will be, too.
