Why the Sharing Economy Continues to Attract Multinationals like Ford

Why the Sharing Economy Continues to Attract Multinationals like Ford

Imagine you could have a convertible for an open-air drive to the beach, a Jeep to throttle through rocky tracks and a sports car for a night downtown. Rather than buying a particular car (that may be left idle intermittently), you enjoy efficient, affordable and timely transportation options. This is how the ‘cars-as-a-service’ model is going to offer virtually endless possibilities in the future.

Cars-as-a-service models include car sharing, ride sharing and car leasing via subscription. Autonomous cars-as-a-service refers to sharing rides in self-driving cars, which brings about increased flexibility and freedom for users. Simply put, cars are provided as a service, instead of the traditional ownership and contract model. People’s relationship with vehicles are likely to evolve with the changing direction of the automobile industry, towards greater mobility and flexibility.

With cars-as-a-service models gaining traction among multinational automakers like Ford, these opportunities are driving the future of the automobile industry. The cars-as-a-service model is also growing at an opportune point in time when ride-sharing and autonomous vehicles are picking up steam.

How Ford is approaching the sharing economy with cars-as-a-service

Recently, American automaker Ford launched startups and subsidiaries such as Canvas (cars-by-subscription service), Ford GoRide (non-emergency medical transit), Ford GoBike (electrified bike-sharing setup), Chariot (ride-hailing service) and Argo AI (autonomous driving vehicle).

Canvas is a simple way to let subscribers get a car they would like to drive without the commitments of traditional lease contracts. The monthly price starts from around $400 also includes everything that a driver needs to get — insurance, warranty, and maintenance. You are not stuck to the car you have chosen; cars can be swapped out and delivered using the app. The subscription model was well-received right from the beginning, with the Canvas fleet driven over 3 million miles, a stunning 120 trips around the equator.

While the concept and technologies of ride sharing are not unique to Ford, their Transportation Mobility Cloud, on the other hand, could be a true differentiator. The objective of the platform appears to be to build a network by connecting smart transportation services, from bike sharing to ride hailing, to public and private transportation. By linking the many sources of transportation data in real time, Ford aims to ease travel and commute, making it safer and cheaper. With the data gathered and connected, Ford could set up a true technology segment that raises revenue via subscription, to city planners and transportation architects.

‘The Future of Transportation is Driverless, Shared and Networked’

Steven Montgomery, Vice President of Viacom Media Networks

By embracing the changing consumer preferences, Ford continues to set itself up for success in the sharing economy and automobile industry. Furthermore, potential game changers like the Transportation Mobility Cloud could bring them to the lead in the future of transportation. The future of transportation appears to be shaping up to be very competitive, not only in the manufacturing aspect but also in data and technology. However, Ford's early initiatives are likely to bolster its chances of staying relevant. 

What does this mean for the sharing economy as multinationals continue to hop on the bandwagon?

With the likes of Airbnb, Uber and Lyft, sharing economy businesses and its inherent element of collaborative consumption have proven to be persistent and disruptive. A marked number of companies have dived into integrating sharing-based strategies with their core businesses. For instance, Facebook launched their Marketplace feature, General Motors is partnering with Lyft, and Electrolux is aiming for an ‘Uber for Laundry’.

Increasingly, companies see the need to be open to the opportunities of sharing-related technology. These include the possibilities of how such opportunities could be integrated into their business, streamline operation and flows, smarten processes and reduce costs.

The sharing economy appears to be here to stay. When a customer, user or organization has experienced the ease, flexibility and cost-effectiveness of a sharing economy service, they start to see the benefits of the possibilities beyond the traditional consumer model. This in turn generates lots of consumer demand for such affordable, easier and more personalized services, which invigorates the sharing economy and the chances of the new model staying to destabilize traditional models.

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