FordPass & Google NHTSA Discussion – Future of Mobility as a Service

I have to admit I did not pay enough attention to the FordPass unveiling that happened at the Detroit motor show. That and the news yesterday from NHTSA that Google’s Level 5 (level 4 for NHTSA) solution has the potential to be classified as an operator are two really important items for this industry to shift from an extremely product focused mindset to service and solutions focused. Ok that might sound a bit too emphatic but the bottom line is that remaining competitive and top of mind with customers requires a focus out of car selling, aftersales selling into new mobility solutions that are part of a large door to door transportation effort.

And let me add here that initiatives like FordPass are not isolated, in Europe almost every OEM ranging from BMW to Mercedes Benz (Germans were the first to set these mobility focused business units) to Opel offers a multitude of mobility options to its customers. US OEMs have been a little late to this game but in a market where public transportation is hard to come by and very fragmented launching these mobility initiatives requires a deep understanding of commuter patterns in specific cities.

FordPass – Inspired but an Interesting Start

Ford CEO said an interesting phrase at the unveil that the company wants to transition from a car company to an auto and mobility company. This also coincided with the remark on how Ford is turning into a data-driven enterprise. Let’s admit that despite efforts like OnStar by GM, Ford remains the one volume automaker that has had the courage to be the first adopter on many technological fronts, e.g. the first one to look at large scale smartphone-in car integration and building native apps by working directly with developers. They did feel the pinch of being the first mover with usability issues but that hasn’t stopped the innovation. Everyone knows about the Ford Smart Mobility experiment that was unveiled at CES 2015 but the FordPass is a major result of that going live in April 2016. What it covers and offers

• No membership fee for joining for both Ford and Non-Ford owners. Yes the app is available for non-Ford owners. Conquest anyone J
• Four pillars to it where the marketplace offers a limited number of mobility offerings like car sharing, FordGuide that offers a live support service where users can book parking spots and pay for them using a dedicated Ford Wallet solution, FordHub a customer experience zone set up in malls (First one in New York followed by London, San Francisco and Shanghai) and FordPass Perks which is a rewards program of sorts.
• Ford has accomplished this through a number of partners on board including ParkWhiz, Parkopedia, FlightCar, McDonalds, 7-Eleven and others. The idea is to be an integrator of sorts providing customers access to services through dedicated partners.
• Ford users also get access to (starting with the new Ford Escape with AT&T LTE built in) the Ford SYNC Connect service that is free for 5 years and provides a number of vehicle access, vehicle health features using their Smartphone. FordPass users can also use the SYNC Connect feature and set up service appointments at dealerships and use it to access their vehicle finance account details.
• There is a very clear logical flow to this, FORD SYNC already exposed users to their smartphone functionality in the vehicle, the smart mobility experiment laid the grounds to understand mobility patters and usage of people in different cities globally, the LTE addition gave Ford the ability to remotely connect vehicles and then came FordPass which is a starting point of an all-encompassing effort to lure Ford and Non-Ford users into its new efforts. The heart of all this is the connected experience and how it can be leveraged to offer users not just a content rich vehicle but different ways to move around. And remember this solution has only scope to be expanded, am sure in the future Ford is considering some form of EV charging options that can be added to this, new experimental leasing efforts like Ford Credit Link that will add more color to this innovative effort.
• The Ford effort is not isolated. A very similar effort is what Mercedes Benz rolled out couple of years ago called Mercedes Me which is an unified platform offering Mercedes Benz users a number of options from move me (access to Daimler’s mobility solutions like Car2Go) to connect me to inspire me and others. Of course Ford has intelligently tailored the solution for both owners and non-owners with a clear intent – not lose a customer after 3 years of warranty but give them enough to sustain that relationship longer.
• Giants like GM are also taking initial steps to a mobility driven future with the Maven solution albeit that is a more conventional car sharing program. But GM has the established powerhouse OnStar that already provides many of the FordPass like services such as vehicle access and control, concierge services with partners like Priceline.com and Dunkin Donuts.
• Bottom line is that there is massive experimentation happening across OEMs on the leasing front, ownership front, A to B relevant services, paying and acquiring these services and how all of these are organized to attract new customers and sustain existing relationships. This to me doesn’t sound only like an effort to compete with Uber type models but as Ford mentions a result of a detailed study across companies like Amazon, Burberry, Tesla and so on who are setting benchmarks on the customer service front.

Google Level 5 & NHTSA–Other OEMs could be inspired on Level 5 Now

First I recommend a quick read of this letter from NHTSA - https://isearch.nhtsa.gov/files/Google%20--%20compiled%20response%20to%2012%20Nov%20%2015%20interp%20request%20--%204%20Feb%2016%20final.htm

NHTSA release is basically an attempt to clarify as to how Google’s level 5 self-driving vehicle will be certified by FMVSS and Google’s claim to consider the underlying AI software to be considered as an operator of the vehicle. All NHTSA has mentioned is that this can be considered but there will be a rulemaking process behind it and will take time. The essential piece of the NHTSA puzzle here is to bring these vehicles to the market easily before each states come up with their own contradicting rules (case in point Tesla’s fight in Michigan for selling its dealerless vehicles). Now this does open up a few interesting trends

• There is a certain intelligence and objective as to why Google is focusing purely on Level 5 whereas most OEMs are looking at a stepped approach. Google’s claim is simple, in order for these autonomous vehicles to impact safety and reduce fatalities the biggest error proponent the human needs to be out of the loop at all times. Most other OEMs despite having the ability to go level 5 are not willing to commit because of other crucial reasons that they have been exposed to after years of being in this business – quality and liability issues. All it will take is one major road accident to completely reverse the roadmap on this. And Google is also in parts targeting mobility for the physically challenged and taking a partnership route to set these solutions for a start in controlled environments, e.g. university campuses where this might actually work. The only other OEMs that have been vocal about Level 5 are the US ones Ford and GM showing certain willingness to look at the concept and even look at Google as a partner.
• The other major advantage from this is the big challenge of driver-vehicle handoff HMI and readiness assessment that can be near to eliminated if the focus is on L5. This is one area where most OEMs are putting a lot of development dollars and thinking of different redundant driver status monitoring means by which they can firmly assess driver take over readiness and alert mechanisms they have to develop to keep the driver in the loop and engaged when needed.
• From a mobility solutions angle this is definitely interesting as it allows a number of different combinations for OEMs to use this technology in conjunction with their alternative fuel vehicles to come up with new models. Imagine a Maven type service that will pick you up from the campus and drop you home and if 4 friends can share that ride and split the cost.

These two announcements are definitely crucial development trends in the market that is showing signs of a transformational shift into a service driven future.

1. Expect more OEMs in 2016 to launch scaled down or similar efforts which definitely will include the vehicle to dealer link piece, more innovative retail experience points which are not meant to be pushy on sales and most importantly target a few US cities on mobility integration efforts.
2. An interesting read on this is how Mercedes Me concept came on board from a cross functional team (telematics, sales, product guys all came together) with one vision – best customer experience.
3. Expect some inorganic activity in this space where there will be more GM Lyft type transactions where the idea will be to integrate a decently established service as a white labelled OEM service. Smart parking companies, innovative carpooling and sharing companies will definitely be on that list.

This doesn’t mean the end of car selling or leasing but it gives new ideas to the financial services arms of OEMs like fractional car ownership, limit the involvement of dealer into everything thus giving them a chance to build a direct customer relationship that has eluded them for years and most importantly start getting returns from those millions of dollars invested into high speed connectivity in the vehicles by way of longer term customer engagement.