Mark Fields: Why Ford's purchase of shuttle service Chariot made sense

Greg Gardner
Detroit Free Press
Ford will supply more of its Transit vans to the Chariot ride-sharing shuttle service it has acquired. In addition, it will introduce Ford GoBikes to a bicycle-sharing network in the San Francisco Bay Area.

Ford sees ride-sharing not only as the frontier for autonomous vehicles, but as a way to sell Transit vans to a small start-up, Chariot, that doesn't have as broad a reach as Uber and Lyft, CEO Mark Fields said Monday.

It's a contrasting strategy to General Motors' $500-million investment in Lyft.

Ford announced last Friday it has acquired Chariot for an undisclosed price.

Both automakers are supplying new vehicles to their partners, but GM is doing it through lease programs targeted at Lyft drivers in about a half dozen cities. Chariot is a more local on-demand shuttle service in San Francisco that moves riders in about 100 Ford Transit vans along 28 routes in that city.

"Purchasing Chariot allows us to really scale this fairly quickly to at least five more cities in the next 18 months," Fields said.

While Ford is buying a smaller piece of the ride-hailing pie, it is also capturing the fare revenue of its newly acquired partner. GM and Lyft have not discussed how they divvy up the fares riders pay.

"With a shuttle service, it's much more efficient because you have multiple passengers using one vehicle,"  Fields said.

So Lyft and Uber will depend, at least in the near future, on drivers who own their vehicles, but Ford is interested only in ride-sharing networks that use only its vehicles.

None of the major ride-sharing companies, including Uber, are profitable today. Uber reportedly lost about $1.2 billion in the first half of 2016, but much of that loss was generated in China where it recently agreed to sell its business to competitor Didi Chuxing.

In some ways Ford's strategy is more cautious, but if it can accelerate Chariot's growth, the investment may pay off.

One thing Chariot will not be is a large buyer of autonomous vehicles. The Transit vans for now will be powered by gasoline engines with human drivers.

"We have a history of taking technology and scaling it very quickly, whether it's EcoBoost engines, or aluminum F-150s or Sync," Fields said. "The cost and convenience of a shuttle is very compelling."

Contact Greg Gardner: 313-222-8762 or Follow him on Twitter @GregGardner12.