Ford plans to have a fleet of fully autonomous cars operating in a ride-hail service by 2021 – Recode

Posted: Tuesday, August 16, 2016

Ford is finally taking the plunge and setting a date for the launch of a fleet of fully autonomous cars.

Ford CEO Mark Fields announced that the company is working toward launching a fleet of commercial, level 4 (one level below a completely autonomous system, in which drivers don’t have to be engaged) vehicles in a ride-hail service by 2021.

The details of that ride-hail service — such as which company Ford will partner with to operate it — still haven’t been determined. Fields made the announcement at a meeting with Ford employees at the company’s Palo Alto research and development center.

As part of that effort, Ford is investing in Velodyne, a self-driving tech company, and is working with three other startups. Ford has acquired Israel-based computer vision and machine learning company SAIPS, struck up an exclusive licensing agreement with machine vision company Nirenberg Neuroscience LLC and, as previously announced, invested in 3-D mapping startup Civil Maps.

The company, which is also expanding its Silicon Valley R&D facilities and doubling the team by the end of the year, is still exploring its options when it comes to a partner and/or acquisition target in its ride-hail service.

“All the options are on the table,” Fields told Recode, echoing previous interviews. “There are some things we’re going to do on our own, [for] other things we’ll partner with others. It all comes down to answering two really important questions: Where do we want to play, and how do we want to win? We’ll talk with a lot of folks and we’ll make more news about that as we get closer to introducing the vehicle into the marketplace.”

Uber previously pursued a self-driving partnership with Ford as well as other automakers before striking a deal with Toyota, as Recode has reported, but this doesn’t necessarily preclude the two companies from pursuing a partnership down the road.

Fields said that self-driving cars as a service — either through a car-sharing program or a ride-hail program akin to the company’s dynamic shuttle experiment — will be the primary opportunity for revenue from its self-driving vehicles for the early part of the next decade. It’s a distinct departure from the executive’s position in April 2015. At a press event, Fields said that he didn’t think the Uber and Lyft model would supplant personal car ownership.

“I think [Uber and Lyft] have been very successful,” Fields said. “But no, I don’t think that world is all going to go to car sharing in a compact period of time. I’m very bullish about our traditional business and I’m very bullish about how we’re thinking about mobility.”

Today, Fields said the self-driving technology will likely be too expensive for individual ownership, at least for the first half of the decade.

“The first application of the fully autonomous vehicle will be commercial applications, whether it’s ride-hailing or parcel delivery,” Fields said. “These vehicles, given the technology they have, will still be relatively costly. So when you look at ride-hailing services and you look at the economics of that business, the biggest cost is the cost [of] the driver. When you take that element out, it not only restructures the cost of the ride-hailing service, but the cost to the consumer ultimately comes down. As the decade goes on, you’ll see more application from individual or retail consumers, but we see that happen in the back half of the decade.”

Even though the company is continuing to invest in driver assistance systems — which is typically considered level 1 automation — Ford doesn’t plan on developing level 2 or 3 autonomous technology. In other words, the company is not creating its own version of Tesla’s autopilot.

“Those are high levels of automation where you’re still expecting the driver to take over,” Raj Nair, Ford’s executive vice president of Global Product Development and chief technical officer, told Recode. “What we’ve found is [that] it’s difficult to keep drivers engaged. So we don’t feel it’s prudent to offer that type of experience, which is why we’re not doing a stepping-stone approach — we’re doing the full leap into fully autonomous technology.”

But some, Elon Musk and Volvo’s North America CEO Lex Kerssemakers included, prefer the stepping-stone approach. Those who support Tesla and Volvo’s point of view argue that rolling out semi-autonomous technology allows consumers to become better accustomed to how the technology works.

That’s not an issue for Ford, Fields said, because consumers trust their brand and that these level 4 (out of 5) autonomous vehicles will be as safe as consumers expect all cars to be.

“We feel really good about where we’re at,” he said. “We’re taking the engineering know-how we built up over 10 years and our technical partnerships, [which] are strong and they’ll continue to get strong going forward. That gives us the confidence to be on the glide path to … having this vehicle in the market in 2021.”

The company will also triple its fleet of self-driving Ford Fusions that are being tested in California, Michigan and Arizona to 30 and plans to triple it again next year.

Correction: An earlier version of this article said Fields said transportation as a service “will be the primary source of revenue for its vehicles for the early part of the next decade.” It has been corrected to show the company sees it as the primary source of revenue for self-driving vehicles.

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