American automaker Ford is partnering with ride-hailing service Lyft as the competition to develop self-driving cars heats up. John Dyer reports from Boston.
Ford is largely responsible for writing the history of classic American car manufacturing. The Detroit-based company is on the search for partners to help it write the next chapter: driving in the 21st century with self-driving vehicles and electric drive.
After collaborating with Argo AI, a Pittsburgh-based startup specializing in artificial intelligence, Ford has decided to team up with Lyft to develop self-driving cars, marrying the former’s manufacturing and self-driving expertise with the latter’s growing network of customers. Both companies know how to manage fleets of vehicles and crunch big data to hone operations.
Lyft and AI
“Someday, when you open the Lyft app during a period of high demand, Ford and Lyft software will need to be capable of quickly dispatching a self-driving vehicle so that you can get to your destination as quickly and as safely as possible,” wrote Sherif Marakby, who oversees autonomous and electrified vehicle operations at Ford, in a statement.
“We strongly believe that leaders across industries should work collaboratively to introduce self-driving technology in a way that positively impacts our cities,” said a Lyft blog post.
The two companies are launching tests of Ford’s self-driving cars and technology springing from Ford’s join venture with Argo AI, an artificial intelligence startup based in Pittsburgh, a centre of robotic engineering in the U.S. Ford invested $1 billion in Argo AI earlier this year.
Carmakers need new strategies
The cooperation with Lyft is expected to be a highlight of Ford’s new CEO Jim Hackett’s presentation to investors on Tuesday. A former furniture executive, Hackett, 62, took the helm at Ford in May amid concerns about the car company’s direction.
“We expect Ford’s next strategy to be more open to partnerships, new structures, new entities, and far greater emphasis on all-electric vehicles,” said Morgan Stanley auto analyst Adam Jonas in a research note.
After a boom in sales following a slump after the 2008 recession, American car companies are suffering a drop-off in sales that is leading many to review their strategies. That could make Hackett’s job more difficult, argued Jonas.
“We are not convinced investors are prepared for the required sacrifice to near-term profit,” the analyst wrote.
Breakthrough in four years
Lyft, meanwhile, is already cooperating with Google parent company Alphabet’s self-driving business, Waymo, and General Motors, which has a $500 million stake in Lyft.
They and Ford are using Lyft’s so-called “open platform” for autonomous cars, a system designed to help collect data from self-driving cars joining Lyft’s business of 1 million rides per day.
American carmakers are reportedly expected to begin production on fully autonomous vehicles within the next four years. Automakers are designing those self-driving cars to require drivers to sit behind the wheel and pay attention to the road to correct any of their technologies mistakes, however.
In addition to carmakers, Apple, Google parent company Alphabet, Uber and other tech companies are also investing heavily in self-driving cars. Lyft’s main competitor, Uber, is now locked in a court battle with Alphabet for allegedly stealing secret’s from Waymo, an Alphabet-owned self-driving tech firm.
Far lower costs
The stakes in the race to perfect self-driving vehicles are becoming more clear.
Boston Consulting Group recently issued a report saying self-driving cars will cost half as much to drive if they are used by ride-sharing services like Lyft or Uber or owned by groups, suggesting the cars would be driven more often when people need them rather than letting them sit idle in parking lots and garages.
Navigant Research suggested that around a quarter of all journeys by car in the U.S. will be in electric, self-driving cars and operated by ride-sharing services.
“There is no doubt self-driving vehicles will have an impact on how people and goods will move more efficiently in the future,” wrote Marakby.
“But the magnitude of that impact – and how quickly self-driving vehicles can benefit society – will largely depend on businesses, government and the public working together.”