Navigant Research Blog

FordPass Points to a Future beyond Selling Cars

— June 21, 2016

CarsharingAt first glance, the FordPass smartphone app seems like an also ran, a remote control app similar to what other automakers have been making for years. However, after spending a week driving the 2017 Ford Escape and having a conversation with Don Butler, Ford’s executive director of connected vehicles and services, it’s clear that FordPass is the beginning of something potentially much larger. This is the first automaker-produced app that is specifically designed to provide services even to drivers who don’t own a vehicle from that brand.

The 2017 Escape and Fusion are the first Ford-brand models to offer SYNC Connect, the company’s new telematics service. Ever since Ford announced its SYNC mobile device connectivity system in 2007, the company has focused mainly on brought-in solutions. SYNC has used the phone to enable features like automatic emergency calls and vehicle diagnostics. Connect adds a 4G LTE data modem to the redesigned SYNC 3 that debuted in 2015. Until now, Ford had only used embedded cellular telematics on its premium Lincoln models and plug-in electric vehicles.

No Subscription Fees

The addition of a built-in data modem enables Ford to add capabilities such as remote start and lock/unlock similar to what GM’s OnStar and other telematics systems have offered for 20 years. However, unlike most other automakers, Ford has opted not to charge any subscription fees for SYNC. Basic services will be provided for 5 years at no additional charge beyond the option price of Connect. OnStar now provides 5 years of free basic services on new cars and 3 years on vehicles from 2011 on that are reactivated. Premium brands such as BMW include up to 10 years of service in the purchase price of the vehicle.

The FordPass app was developed in collaboration with San Francisco, California-based Pivotal, a cloud platform development company. Following the spring 2016 launch of FordPass, Ford also announced a $182 million investment in the company. “Ford is reorganizing into a hardware, software, and services company,” said Butler at the recent TU-Automotive Detroit conference. “We recognize that software and services cut across multiple boundaries and FordPass is a platform for delivery of some of those services.”

Shifts Are Coming

Navigant Research’s recently published white paper, Transportation Outlook: 2025 to 2050, projects shifts in the current model of vehicle ownership. As this model changes, Ford wants to be ready to manage the new relationship that people have with mobility. FordPass is a component of the automaker’s new Smart Mobility subsidiary that is structured to capitalize on business partnerships, much like Ford Credit. The full business model of FordPass is still being worked out, but one of the first elements that extends beyond vehicle control, roadside assistance, and live chat support is parking. FordPass will enable users to find, reserve, and soon even pre-pay for parking—regardless of the brand of vehicle they drive. It also will likely include some revenue-sharing component with partners in exchange for leads.

 FordPass Find Parking

FP_Find_Parking_Lumina

(Source: Ford Motor Company)

At the 2016 North American International Auto Show in Detroit, Ford used the platform to reserve parking spaces available for media. Drivers only had to show a QR code on their phones to gain access. Other potential future additions to FordPass include localized deals with other merchants, usage based insurance, or ride-hailing systems such as the Dynamic Shuttle service that Ford is currently piloting at its Dearborn, Michigan product development campus. The shuttle service was deployed prior to the release of FordPass, but it could be easily integrated in the future along with carsharing and bike-sharing, or even transit passes.

Ultimately, for Ford and every other automaker, it comes down to expanding the scope of their business from manufacturing and selling vehicles to moving people and goods from place to place efficiently.

 

Multi-modal Apps of the Future Pay Customers to Reduce Congestion

— April 15, 2016

CarsharingPreviously independent modes of transportation such as walking, bicycling, train, bus, taxi, ridesharing services, and personal vehicle usage are becoming increasingly integrated. Multi-modal programs that allow city residents to plan trips using a variety of transport options is one of the major trends in the evolution of the smart city mobility market. Application services such as CarFreeAtoZ and TripGo allow users to plan a trip with up to five mobility options and combinations (train, bus, car, bicycling, and bike-share). Other services such as the GoLA app (powered by Xerox) integrate planning options to include carsharing (Zipcar) and ridesharing (Lyft) services.

Multi-modal apps allow customers to choose the most efficient routes possible to save on commute times. Most apps also include information on the carbon emissions of the trip combinations and options, allowing users to make more informed decisions about how their trip may affect the environment.

New Apps with Big Potential

A prototype transportation app called NextCity looks to not only help users plan their commutes, but also help them get discounts on transportation options that help to reduce vehicle congestion. Users will be offered incentives to change their transportation route based on traffic conditions. For example, the app might offer a discount on the ferry or train if there is construction or an accident on a typical driving route.

NextCity is unlike some of the startups in this space that lack the infrastructure connections and financial backings to make a significant impact. The app is a project of San Diego-based Cubic Transportation Systems (CTS), a subsidiary of Cubic Corporation. CTS is a leading integrator of transportation payment and information solutions and already powers major payment systems such as London’s Oyster card, Chicago’s Ventra card, and San Francisco’s Clipper card. The baseline of public transportation data available to CTS, combined with the current operation of public transit payment systems, enables the company to not only help with route planning, but also integrate and adapt payment systems. The company’s goal is to develop the NextCity app as quickly as possible to create a single-account system covering payment for all modes of transportation (including bikes and bike-share, ridesharing, tolling, parking, etc.).

While many route planning apps are helpful to users and are increasing in adoption, adding a financial incentive to users is expected to significantly increase participation among city commuters. It’s one thing to be informed of alternative transportation options—it’s something else entirely to be paid to use them.

 

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