November 29, 2016 - From the November, 2016 issue

Envisioning A Realistic City of Tomorrow Mobility Ecosystem

This month, prior to the LA Auto Show, Automobility LA convened established and nascent industry leaders to elaborate on their vision of for an urban transportation future cultivated by public and private cooperation. TPR presents excerpts from this discussion of city mobility, which featured Ford Motors President and CEO Mark Fields (pictured), Los Angeles Chief Sustainability Officer Matt Petersen, and Chariot co-founder and CEO Ali Vahabzadeh. Forbes Deputy Digital Editor Andrew Nusca moderated.


Mark Fields

"All of this work will help us unlock the future of transportation systems. Beginning next year, we’ll be directly engaging with city leaders, tech visionaries, urban planners, designers, and local communities—bringing public and private together to discuss and develop solutions for transportation systems that can improve people’s lives in ways that we can only just begin to imagine." - Mark Fields, CEO and President, Ford Motors

Mark Fields: We are partnering with some amazing thinkers to bring fully autonomous vehicles to life—with no steering wheel, no gas pedal, and no brake pedal—starting in 2021, for use in ride-sharing and ride-hailing services.

Importantly, leading in these mobility solutions and working together with cities is good for our business. Ford has been a longtime partner to cities around the world as a leading provider of vehicles for police, rescue, and taxis. That will continue, and even grow, as we become even closer to key cities, which will improve our core business of building and designing great vehicles.

But at the same time, we’ll see substantial revenue opportunity in providing mobility solutions to millions of commuters in the US and the growing workforce in several major cities globally, many of whom do not own vehicles or do business with Ford today.

All of this work will help us unlock the future of transportation systems. Beginning next year, we’ll be directly engaging with city leaders, tech visionaries, urban planners, designers, and local communities—bringing public and private together to discuss and develop solutions for transportation systems that can improve people’s lives in ways that we can only just begin to imagine.

Today, I’m proud to announce that Ford is going to begin to collaborate with Mike Bloomberg and his philanthropic work with a coalition of mayors worldwide. We’re discussing how we can work together to help create that city of tomorrow—incubating ideas around mobility to accelerate solutions in cities. Working with Bloomberg, we’ll collect the best ideas around the world and then put them into action.

At Ford, we clearly understand that achieving this success cannot be done on our own. It will require working together, partnering, and, just as importantly, listening to one another. That’s why today, we’ve invited some of the country’s best mobility thinkers and leaders to continue this conversation about how we, together, can create that city of tomorrow. 

Andrew Nuska: Matt, the role of the city has changed. How are you working with automakers, auto services companies like Chariot, and the different modes of transportation now versus 10-15 years ago?

Matt Petersen: We have to think about how to create a sustainable city, and that’s about the people. How do we create a city that people can thrive in, that their families can grow in, and that they can not just be proud to live in, but actually thrive in? That means access to parks and open space, clean air, and mobility options.

We created our first ever Sustainable City pLAn, where we set targets for 2017, 2025, and 2035 for how we can improve our communities across the board, for everyone. Through that, we’re leading investments in EV car- share for disadvantaged communities—the first in the world—which we’re rolling out next year. We’ve increased publicly available EV-charging stations to 1200 currently; we’re on our way to 1500, the most of any city in America. We’ve also had the most solar of any city in America.

We’re doing more in terms of mobility, to reduce per capita VMT and increase mode-share and mode-shift. Working with Ford and other automakers is critical to that future.

From a public transit standpoint, we just passed $120-billion public transit initiative over the next 40 years. A huge amount of investment is going to be coming into our communities throughout the county, and our mayor, Eric Garcetti, led the charge to get that passed. It was a huge victory for the environment, for the most disadvantaged in our neighborhoods, and for everyone. That’s going to be critical to our future. So how do we do it?

Public transit folks are a little nervous about on-demand, thinking, “What does it do to our services?” But we know we need to add them. We don’t want to lose ridership, but we need to provide more first-and-last-mile solutions when people need it and where they want it.

Andrew Nuska: Ali, you started Chariot to solve this problem. Can you explain what we’re talking about here?

Ali Vahabzadeh: We launched Chariot in San Francisco in 2014 as a crowdsource solution to commuting from residential neighborhoods to work districts like Downtown and South San Francisco. What we learned very quickly was that one in five of our riders were taking Chariot as a first-and-last-mile solution to a transit hub, like the ferry or Caltrain.

That got us really excited. Chariot can’t—and probably shouldn’t—replace trunk lines and commuter rail, but if we can get people to feed into trunk lines, whether it’s bus, ferry, train, or even highways, that’s a big win for us.

We are now working with the governments in San Francisco as well as the second city we just launched in, Austin, Texas—where our first route is a first-and-last-mile solution between a Metro rail line and a business district where Whole Foods Market has their headquarters. Working with cities is a natural progression of our business model. 

Andrew Nuska: You said it’s a win for you. It’s a business opportunity, is really what you’re saying.

Ali Vahabzadeh: Yes, and it’s a win-win. It’s a win for the rider, it’s a win for us, and it’s a win for the municipality and the transit agency as well, because they can continue to provide resources to the trunk lines, and the team at Chariot can fill in the gaps in transit deserts that exist now.

Andrew Nuska: Mark, speaking of business opportunities, I never thought I’d see a bicycle with “Ford” on the front of it. A lot of regular consumers, both drivers and non-drivers, are asking themselves, “Why is Ford doing this?” How are you looking at this through the business opportunity perspective?

Mark Fields: It has to make business sense. We want to do right for our community and right for our customers, but we also have to run a profitable businesses.

Any good business will take a point of view on the world that is 10-20 years out. We have to look at consumer trends, and then we have to rewind that. As a company, we need to start making the right bets, so that that future world that we envisioned, that we saw from our past, and we position ourselves for success.

The business opportunity alone is huge. The traditional auto industry is trillions of dollars around the world. If you open that up to transportation services, it’s more than double that. We, as well as a lot of our competitors, have zero of that.

As we think about the future world, we think deeply about the conflicting needs in the city. They want more capacity to get the flow of people being able to live their lives. At the same time, they want to reduce pollution and reduce congestion.

Advertisement

After talking to a lot of mayors and city officials, we’ve seen that this is not only a quality-of-life threat to people; it’s also an economic issue. If people can’t come downtown or shop or go to dinner, or commercial businesses can’t deliver goods, that’s an issue.

Rather than just coming in and saying, “We just want to do business in city boundaries,” we want to come to cities and say, “What are your issues? What are you trying to solve? And how do we as a company bring our unique assets to help you achieve that and provide a good business opportunity?”

Andrew Nuska: This is different, right? Automakers have not dealt this way with cities before.

Mark Fields: It is new, but as I mentioned in my remarks, we have been dealing with cities for many years. We provide vehicles for taxi services, rescue, emergency vehicles, police cars, etc. We have these relationships. But now we’re trying to look at the ecosystem beyond the sale of the vehicle, and open up new revenue opportunities.

At the same time, we also want to make people’s lives better, which is what the cities want to do.

Andrew Nuska: What is the primary driver here? We’ve outlined a number of benefits: environmental, keeping the citizens happy, and certainly economic. Where can you get the most oomph when you’re trying to push these things through a bureaucracy?

Matt Petersen: It’s expected that half a million more people will move into Los Angeles by 2035. How do we welcome them to a thriving city? We know that people struggle with traffic. They struggle with schools, housing prices. What are the things we can do to make people’s lives better and to make our city better?

We’re increasing the amount of housing we’re developing in the city to drive down the price of housing. We’re increasing the investments we’re making in our streets, and doing our best to work with school districts. In terms of mobility, this $140 billion we’re going to deploy over the next 40 years is significant.

But we also need to look at innovation. How do we integrate mobility into our electricity grid? The future of autonomous vehicles and electric vehicles are seen by many as synonymous. And not everybody will have to own a car, but will be able to get around and get to work with shared mobility.

We want to take Los Angeles from being known as the city of fast cars, big green lawns, and swimming pools, to being known as the city at the future of shared mobility, drought-tolerant landscaping, and solar-powered heating for your pool. How do we make that a reality?

It’s going to take collaboration and innovation. We’re testing right now at the police department, a longtime partner of Ford’s, how to get more EVs on the road. We have more than 200 EVs for detectives and field staff, and we’re testing how to get pursuit vehicles that are 100 percent electric as well.

These are the kinds of things that we’re going to do, and we’re also excited to be one of the 10 cities that is going to be part of the Bloomberg initiative.

Andrew Nuska: Is there a possibility that LA will no longer be thought of as the traffic, gridlock capital of the world?

Matt Petersen: We know we can do it.

In 1984, we had a successful Olympics, and in 2024, we hope to welcome the Olympics again. It’s not just going to take shifting of transportation to make it possible to move around this great city.

By then, we’ll have invested significant dollars in innovation into our streets and into those mobility options, so that when people come to visit from around the world for the Olympics, they are welcomed with lots of mobility options.

Andrew Nuska: Ali, your company is still young. You’re looking at how you’re going to grow, and which cities and markets you’re going to enter. How are you deciding that? Which problems are you trying to solve? Not every city is LA; in fact, none of them are.

Ali Vahabzadeh: Two years ago, when we started, I couldn’t get anyone to pick up the phone. Now, mayors and transit authorities are reaching out to us proactively, saying, “We understand what you’ve done in San Francisco and what you’re building in Austin. How can we be a part of that? How can you solve some of these transit deserts, long first-class commutes, and other conundrums that we have in our municipalities?”

Suffice it to say, it’s a bit of an embarrassment of riches, and we have the choice now to partner up with large cities that want us to help solve their issues.

Matt brought up equity and affordability as two of the most important items. As a start-up, we were able to make money on $4 a fare. Now, with the help of Ford in being able to drive down costs, we’re looking forward to be able to have a mass transit product that can get people around very affordably.

Andrew Nuska: Mark, how do you see Ford in 20 years, 50 years, or 100 years? Is it a hardware company? A services company? A little bit of both?

Mark Fields: Yes. We’ll be a manufacturing company, a technology company, and an information company, all in the guise of a motor vehicle enterprise.

Advertisement

© 2017 The Planning Report | David Abel, Publisher, ABL, Inc.