The Hottest Trend at This Year’s Detroit Auto Show? Not Cars
There is never an official theme at the annual North American International Auto Show (NAIAS), held last week in Detroit, but one usually emerges as automakers showcase their latest innovations, hoping to one-up each other while garnering consumer and media interest. One year it was electrification; another year, it was infotainment. This year, the buzzword capturing the imagination of the automotive industry was mobility.
Mobility, as defined by the auto industry, refers to getting goods and people from point A to point B. This encompasses vehicles for personal use, fleet vehicles, public transit, ride-sharing, bicycles, car-sharing, self-driving cars, planes, trains, and essentially any other form of motorized transport. It often includes an on-demand component.
This year’s auto show was also notable because it seemed to be the first time that automakers saved their big innovation announcements for CES, the massive consumer electronics show that takes place in Las Vegas the week before NAIAS. Car manufacturers increasingly want to be thought of as technology companies, which means we’ll soon see an even bigger automotive presence at events like CES, SXSW Interactive, and TechCrunch Disrupt. Tesla, the car company practically synonymous with innovation, didn’t even bother to come to NAIAS this year.
As the auto industry tries to adapt to the lightning-quick production cycle of the consumer electronics world and how that cycle has come to affect customer expectations, car manufacturers are staring down another big potential problem: those wacky millennials seem to have less interest in owning cars than any modern generation before them. (At least they do right now, though many an automotive bean counter dearly hopes that changes assuming they start getting married and having kids.) And because millennials are such a big group—bigger even than the baby boomers—that means the auto industry’s traditional vehicle ownership models are in need of serious reconsideration.
Dan Ammann, GM’s president and head of Maven, its new mobility arm, said during a media conference call last week that the auto industry will change more in the next five years than it has in the past 50, and not just because of autonomy. Automakers are scrambling to cope with the coming sea change that results when people stop buying cars but have no less need for transportation. The question the car companies are now contending with is how they can monetize this brave new world. The first step, they seem to agree, is to get potential customers familiar with their brand, even if they must do it through, for instance, a partnership with a ride-sharing service.
The first automaker I heard make the business case for mobility, way back in 2012, was Ford. Between this year’s CES and the Detroit auto show, Ford made a plethora of mobility-related announcements that suggest it continues to be at the forefront of the company’s growth strategy. Ford went so far as to call itself an auto company transforming into a mobility company in its press release introducing FordPass, a new platform launching in April that it says “will do for car owners what iTunes did for music fans.”
“Several years ago, Bill Ford starting promoting mobility trends due to the challenges the consumer is facing around congestion and freedom of movement,” said Erica Klampfl, global mobility solutions manager at Ford. “We launched our Smart Mobility plan last year, and [Ford CEO] Mark Fields is helping us transform the company to help address changing customer needs. Now we’re seeing a lot more activity in the industry around mobility, which is validating. It makes business sense, but it also helps human progress.”
FordPass allows any member—it’s free; no Ford ownership necessary—to find and pay for parking in advance, borrow and share vehicles when traveling, schedule service appointments, review Ford Credit vehicle finance account details, and access vehicle features. FordPass members can also get rewards from partner merchants such as McDonald’s and 7-Eleven, and they’ll have access to FordGuides, personal assistants “available day or night to help resolve mobility challenges” at the touch of a smartphone button. (In the press release, Ford takes pains to note that FordGuides’ “only job is to guide, serve and help solve mobility challenges—not to sell,” though one must assume that if a Ford solution exists, it will be mentioned first.)
“FordPass will allow us to engage non-traditional customers that don’t own cars,” Klampfl explained. Ford is currently running a couple of car-sharing pilots both here and abroad, and it’s keenly interested to find out which models consumers flock to. In India, Ford is experimenting with shared access, where three to six people share the same leased vehicle.
At its Dearborn, MI, headquarters, Ford is developing its own ridesharing technology in-house starting with a dynamic shuttle for employees. Instead of the traditionally static dispatcher model, the dynamic shuttle can change on the fly to pick up and drop off riders going roughly the same route. Starting next quarter, a mobile-friendly Web portal and smartphone app will be available to riders. Once a mobile-based ride request is made, the software’s algorithm immediately determines the shuttle best suited to address the request without significantly extending the travel time of riders already on board.
Riders are sent an offer including a proposed pick-up time and maximum duration of the trip, which the requester can then accept or decline. If accepted, the request is sent to the shuttle driver’s navigation interface, along with the most efficient route to complete the requests of all riders in the timeliest manner.
“It recognizes that people’s time is important,” Klampfl said of the dynamic shuttle. “It helps with planning, and we’re positioning it at a price point between a taxi and public transportation.”
The shuttles are adapted Ford Transit Connect vans, each seating six to eight people and configured so riders don’t have to sit next to one another. They are also equipped with wifi and charging portals.
The other big mobility announcement made during this year’s NAIAS came from GM. The automaker is launching its own mobility brand and platform called Maven, and it’s meant to build on GM’s 20-year OnStar legacy as well as its recently announced $500 million investment in and partnership with ridesharing service Lyft.
“The handwriting and opportunity has been on the wall for some time,” said Peter Kosak, GM’s executive director of urban mobility. “Some of the features were developed for OnStar and carried through to Maven. But the core element is the ability of drivers to unlock, start remotely, and drive a vehicle using a smartphone. The guiding star for all of it is to make shared use feel more like ownership.”
GM pulled its 40-person global mobility team together by hiring talent from Google, Zipcar, and Sidecar, which it recently acquired for $35 million. To start, Maven will offer car-sharing to all residents of Ann Arbor, MI, by parking 21 GM cars around the city and making them available at a starting rate of $6 per hour. (Last time I checked, that’s slightly cheaper than Zipcar. Like Zipcar, the fuel and insurance needed to operate Maven vehicles are included in the rental price.)
Maven customers use its app to search for and reserve vehicles by location or car type, and they unlock and start the vehicles with their smartphones. Customers can also access Apple CarPlay, Android Auto, OnStar, SiriusXM radio, and each vehicle’s embedded wireless hotspot. Maven users will also be able to offer their feedback on the car-sharing service directly to GM via WhatsApp.
In the first quarter of 2016, Maven will launch car-sharing services for a select group of Chicago residents in partnership with Magellan Development Group. Maven is also expanding its existing residential program with Stonehenge Partners in New York City (previously called Let’s Drive NYC), giving users on-demand access to vehicles as part of the amenities package they get as Stonehenge tenants. Combined, the two programs will be available to more than 5,000 people. Maven is also testing various car-sharing models, including peer-to-peer, on college campuses and in Germany and China.
Kosak said Ann Arbor was chosen as the first city to offer Maven’s car-sharing services because it’s a college town containing the sprawling University of Michigan campus that can be hard to navigate. “It’s all about access and options,” he said. “You don’t have to be a GM customer to get intuitive, seamless access and options. We see this as a way to introduce GM products to a much bigger market. Then, later on, when they settle down and want a car, we’ll be in a good position.”
Maven’s Ann Arbor fleet is owned by GM, but the automaker is currently exploring how a peer-to-peer option might work there someday. “We’re iterating now, and we expect it to come together soon,” he added. “WhatsApp is an easy way for new customers to communicate directly with our development team and enable us to move faster.”
Kosak said all of Maven’s initiatives are “near-term,” and all of them come together in what he calls the autonomous future. “App-driven community access to a network of vehicles is what the future will look like,” he said. “As we forge partnerships like Lyft, these things will come together in a way that will really disrupt and be super efficient.”
I asked Kosak: Is the auto industry as we know it over?
“With autonomy, it’s not just the auto industry, but how things are financed, city infrastructure—a lot is going to change,” he replied. “But the benefits are otherworldly. It’s the inevitable future of mobility, and it’s going to change everything.”