Skip to Content

Big Auto Searches for Meaning Beyond Selling Cars

Car companies from Ford to BMW take a page from Silicon Valley’s playbook to offer transportation services, in some cases without a real business model in mind.
January 21, 2016

The Ford Motor Company unveiled its new Fusion sedan and powerful F-150 Raptor pickup truck last week at the 2016 Detroit auto show. But shiny new sheet metal and roaring engines were upstaged by the company’s unveiling of a suite of so-called “mobility services.” Those offerings include the shared use and ownership of cars, parking reservations, multimodal routing, small retail stores, and an iTunes-like app to provide access to these services.

Ford CEO Mark Fields explains the auto company’s mobility services strategy to an audience in Detroit last week for the North American International Auto Show.

Ford’s announcement followed news from General Motors a week earlier that it will invest $500 million in Lyft, the on-demand ride-sharing service. On Monday, GM announced that it would acquire the assets of Sidecar, a ride-sharing business that shut down operations on December 31. In fact, nearly every car company is developing a plan of action to respond to the meteoric rise of Uber and Lyft—and to avoid becoming strictly purveyors of mobility hardware—formerly known as “cars” (see “Toyota Wants Its Cars to Expect the Unexpected”).

“We’re at an inflection point where technology is making things possible that weren’t possible before,” said Ken Washington, Ford vice president of research and advanced engineering, from the sidelines of the Detroit show. “Uber showed the world that it can help people get where they want to go.” The implication is that privately owned cars will become less important over time.

FordPass gives customers access to the suite of new services from Ford (above). Ford’s new storefronts resemble Tesla’s retail locations (below).

In November, Gartner, a technology market research firm, predicted that by 2020, 10 percent of today’s vehicle owners in urban markets will replace vehicle ownership with on-demand vehicle access. Thilo Koslowski, vice president and automotive practice leader at Gartner, believes companies like Uber and Lyft have an early-mover advantage in the short-term—but in the long run car companies could become legitimate players in mobility services made possible through car connectivity. He says their success won’t strictly be a matter of investment, but developing a culture and mind-set that extends beyond products.

Ford’s rollout of mobility services, mostly under the “FordPass” brand name, resulted from 18 months of evaluation into building an end-to-end customer experience around the new offerings. FordPass, which launches in April, will be free, whether or not users own a Ford vehicle. FordHubs, the name for its storefront centers—which bear resemblance to Tesla’s retail locations—will open later this year in New York, San Francisco, London, and Shanghai. In February, Ford plans to launch a shared-lease program in Austin, Texas, that will allow up to six friends or neighbors to share a single vehicle. And soon FordPass members can speak directly to a human being, from a team dubbed FordGuides, to book a space at a local parking garage or receive other services.

GM is also focused on the metropolitan areas dominated by Uber and Lyft. Julia Steyn is vice president of GM’s Urban Active program, which she describes as a “startup within a big company.” She points to a handful of GM pilot programs, including a vanpooling effort on Google’s main campus last year; a peer-to-peer carshare program called CarUnity in Germany; and “Let’s Drive NYC,” which provides the shared use of eight Chevrolet crossover SUVs to residents of a 479-unit apartment building in Manhattan.

Big automakers have provided transportation services for years, but the shift to a more service-oriented business model has recently accelerated. The availability of a remote human concierge via a car has been offered by GM, in its OnStar program, for nearly two decades. Other car companies, including Volkswagen and BMW, offer a similar concierge service directly from the car, mostly with the goal of providing roadside emergency services.

There is wide agreement that the shift to services will require partnerships, like GM’s deal with Lyft. Ford is partnering with ParkWhiz and FlightCar for parking services. Ford also announced at CES in January that it’s working with Amazon to integrate a Siri-like cloud-based digital assistant into cars—so drivers can use voice commands to access home automation systems for turning on the porch light or opening a garage door as the vehicle approaches (see “Ford CEO Explains Why It’s Hard to Build Self-Driving Cars”).

Washington, Ford’s research chief, says services would allow Ford to enter the $5.4 trillion market for mobility. But exactly how it will generate revenue is not yet clear. “The specific business model hasn’t been worked out,” he says. The hope is that free services that address the annoyances of transportation will lead to customer loyalty and eventually more car sales.

BMW was early to market with mobility services such as car sharing, parking reservations, routing and ticketing on public transportation, and a recently announced partnership with SmartThings, a home automation company that would allow BMW drivers to remotely access door sensors, thermostats, and home cameras.

Jose Guerrero, head product manager of electric vehicles, high-performance models, and connected technology for BMW of North America, said that its car-sharing program in Munich—which offers everything from Minis to M performance cars, is a way to get potential BMW buyers to try out cars, perhaps years ahead of a purchase. He expects these programs to generate revenue, but his more pressing concern is creating services at the premium level that many BMW owners expect.

When asked if BMW is interested in a shift from becoming strictly a car company into a mobility company, Guerrero used the opportunity to trot out its tagline: “No. At the end of the day, we’re still the ultimate driving machine.”

Keep Reading

Most Popular

This new data poisoning tool lets artists fight back against generative AI

The tool, called Nightshade, messes up training data in ways that could cause serious damage to image-generating AI models. 

The Biggest Questions: What is death?

New neuroscience is challenging our understanding of the dying process—bringing opportunities for the living.

Rogue superintelligence and merging with machines: Inside the mind of OpenAI’s chief scientist

An exclusive conversation with Ilya Sutskever on his fears for the future of AI and why they’ve made him change the focus of his life’s work.

How to fix the internet

If we want online discourse to improve, we need to move beyond the big platforms.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at with a list of newsletters you’d like to receive.