Ford Plans to Deliver the Goods on Autonomy

Ford has no allusions about being first to market—or second or third for that matter—with a commercial autonomous vehicle service. That distinction will go to Waymo, which is expected to debut a robo-taxi service next month in Phoenix, followed by General Motors’ Cruise Automation unit sometime next year in San Francisco.  

But Ford says it is making steady progress with its own pilot programs and is on track to launch driverless commercial applications by 2021. Sherif Marakby, who heads the company’s new Autonomous Vehicles subsidiary, says Ford could launch a limited program with 100 vehicles next year. But that’s not the goal.

To launch at scale with thousands of vehicles and quickly ramp-up to profitability will require more testing to better understand customer needs, establish partnerships and a supporting infrastructure, as well as continuing to improve sensors and control systems, Marakby notes. He estimates the potential profit margin for autonomous vehicle services is "much higher” than the 6-10% Ford derives from its traditional sales model. And Ford expects such profits can be accomplished at less than half ($1 per mile) the going rate of about $2.50 per mile consumers pay for current ride-hailing and delivery services.

Ford and its Argo AI affiliate demonstrated a fleet of autonomous test vehicles and outlined their plans for the future this week in Miami, where Ford has been operating a pilot program since February. The company, which also is conducting tests in Ann Arbor, Mich., Pittsburgh and Washington, D.C., aims to have 100 self-driving vehicles on the road by year-end. During testing, the vehicles carry two Ford/Argo engineers: a backup safety driver and a co-pilot in the passenger seat to monitor and input data regarding the vehicle’s performance, traffic conditions and other variables.

The demonstrations this week were limited to four destinations within a six sq-m section of downtown Miami, which Ford says makes for a good proving ground due to the city’s heavy congestion, varying roads, spot construction areas and unpredictable driver and pedestrian behaviors. During the tests, the self-driving cars navigated double-parked cars, vehicles parallel parking, multi-lane left-hand turns, bicyclists driving against traffic and human drivers failing to give the autonomous vehicle the right-of-way.

Based on data accumulated during the pilot program, Ford has made several changes to the vehicle’s software to handle such challenges. This allows self-driving vehicles to better predict other road users’ intentions and be less passive at four-way stops.

Ford also is working with a variety of retail partners, including Domino’s Pizza, local restaurants, dry-cleaners and Postmates, a San Francisco-based startup that provides delivery services for dozens of companies in cities across the U.S., to evaluate how customers interact with and use autonomous delivery services. One recent change resulting from the program was to include automated voice interactions with customers to make deliveries seem natural and friendly.

A new partnership with Walmart will evaluate various vehicle configurations and potential modifications to best meet customer needs, including the delivery of perishable groceries. Other challenges include how to securely deliver orders to multiple customers on a single trip.  

In addition to Argo, Ford is working with Autonomic, which has developed a cloud-based system to manage payment services, routing and dispatch services. Cars are stored and maintained in a new autonomous vehicle operations terminal Ford set up near downtown Miami.

Ford has earmarked $4 billion to spend in coming years to further develop and launch autonomous vehicle technologies—including a purpose-built vehicle without a steering wheel or foot pedals—and services. CEO Jim Hackett says the company also is open to outside investments, including from rival carmakers. A report earlier this month indicated Volkswagen may collaborate with Ford on autonomous vehicles and make an investment in Pittsburgh-based Argo, which Ford acquired a majority stake in for $1 billion in early 2017.  

What’s clear is that Ford is determined to be a key player in the autonomous vehicle market as new services emerge. The company foresees a $332 billion market developing by 2026, with ride-hailing services accounting for $202 billion and delivery services the other $130 billion.

More information about Ford's plans are available on the company’s blog.