Why’s Ford happy to get cars off the road?

November 13, 2017 4:32 pm


If you ever lived in the GCC, you know that if you’re stuck in traffic, which is commonplace, you will be late to work or playtime by hours. That’s a given.

One car company is smartly trying to prevent that, by providing a service that is much needed in the region: public transportation.

Well, Ford motor company seems to think so.

So what has it done this time?

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Less trouble with shuttle

Similar to services launched by Ford in New York, the car manufacturer will launch a Chariot commuter service in major Gulf cities.

CNN Tech explains that Chariot, a subsidiary of Ford, is a shuttle service that allows passengers to crowdsource routes and reserve rides in 14-seat vans via their smartphone.

That’s potentially 14 less cars on the roads!

 “Chariot operates like a regular bus service, except that seats are reserved. The vans are operated by professional drivers and Chariot commuters reserve their seat using a smart phone app,” according to CNN Tech.  

It continued: “All the vans are GPS-tracked so that customers know when their ride will arrive. Passengers gather at pre-selected points to be picked up and are, likewise, dropped off at locations that provide the greatest convenience to the most passengers.”

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The Daily News quotes Chariot Chief Executive, Ali Vahabzadeh, as saying that the Chariot vans have comfortable interiors, air conditioning and Internet connectivity and provide a work-conducive space for more productive commutes.

But why did Ford come up with a service that should be adopted by government authorities in the first place?

 Hop in for a traffic-free ride

According to Triple P, a media platform, Ford aims to solve transportation woes with its new service.

It cited speakers repeating, during a recent Ford event in San Francisco, that the convergence of self-driving cars with an electric drive train will do little good, if streets are still congested with cars shuttling only one occupant at a time.

The service is also expected to make a good impact in the GCC, with the increasing traffic problems in these countries.

According to Alpen Capital, the number of passenger cars in use in the GCC region is expected to grow at five per cent annually from an estimated 10.3 million in 2015 to 13.2 million in 2020.

Its report said that new passenger car sales were projected at 1.4 million in 2020, compared to 1.2 million in 2015. Although new sales declined in 2016 and will be under pressure in 2017, Alpen said that it expected to see steady growth starting 2018, as the economic environment stabilised and created pent-up demand.

Moreover, a 2017 report by Ventures on Site, a platform tracking construction projects, says that while the GCC population grows and urbanisation continues, fuelling traffic congestion, the GCC governments need to upgrade their transportation systems.

According to the report, congested urban roads, increasing populations and the need for seamless trade corridors continue to drive immense investment in the GCC railway sector.

Also, road building especially is rapidly becoming a key driver of the GCC’s construction industry, due to expected increase in the number of passenger cars in the coming years, according to the report.

Ford’s new service is basically here to fill the gap in certain GCC cities for many years to come.

But the intention behind Ford’s plan to start Chariot in the US is not only aimed at doing a good deed.

New profit source

According to Business Insider, Ford paid $65 million to start the service, so the company surely made its own calculations by making sure that the new imitative will reap great benefits.

Geekwire, a technology news site, reveals that Chariot hints on its website that it aims to be the “world’s best — and first profitable — commuting option in the next three years.”

Automotive News, a platform for auto news, reveals that “Ford anticipates being able to collect revenue from ride-sharing or ride-hailing customers based on each trip rather than getting a one-time payment upfront, as with a vehicle purchase.”

“This is very different thinking for us,” said Ford CEO, Mark Fields. “For years we have always thought about the thing and how many of the thing we sold. We’ve opened up the aperture of the lens to think about the usage of the products.”

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By Dana Halawi
Senior Journalist
Dana Halawi has over seven years of experience in Journalism with articles published in multiple magazines and a newspaper in Lebanon. She specialized in Banking and Finance at the Lebanese American University and has a Master’s degree in International Affairs.



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