Ford, the company that pioneered the car and announced earlier this year that it would focus its US business on trucks and sports utility vehicles, has decided to embrace a far smaller mode of transport.
The car maker said on Thursday that it was joining the race with Bird and Lime in the booming scooter rentals market, with a plan to deploy fleets of electric two-wheelers in more than 100 cities by 2020.
To accelerate its ambitions, Ford is buying Spin, one of several scooter rental start-ups to emerge in California over the past year.
The deal makes Ford the first car maker to enter the so-called “micro-mobility” market. The 115-year-old company has a lot of ground to make up if it wishes to catch up with Bird and Lime, each of which has raised hundreds of millions of dollars and expanded to more than 100 cities worldwide.
"The scooter business has been going phenomenally across the board," Sunny Madra, head of Ford X, the Detroit automaker's new mobility incubator, told the Financial Times in an interview. "The product-market fit is really becoming evident."
Ford did not disclose the price it paid for Spin, a two-year-old company that launched scooters in seven markets, but Axios reported on Wednesday that it paid about $40 million (€34.9 million).
Mr Madra said that his target of launching the scooters in more than 100 cities over the next 18 months would require a "significant investment".
Keeping up with Bird and Lime could mean spending tens or even hundreds of millions of dollars to buy, maintain and charge hundreds of scooters in each area. A raft of start-ups is also raising tens of millions of dollars in the hopes of challenging the early leaders.
Mr Madra, however, believes Ford and Spin can lean on existing relationships with local authorities to win the permits that are generally required to operate app-based scooter rentals.
‘Dockless’ bicycles
In 2016, the car maker’s “smart mobility” group bought Chariot, a private bus service that operates in 11 cities, including San Francisco, New York and London. Spin, which rented out “dockless” bicycles before pivoting to scooters earlier this year, has dozens of bike-hire permits that Mr Madra said could be used for scooters.
The tie-up will also help in securing more scooters, which have become scarce as more companies enter the sector.
“Spin has a pretty good contract for a solid pipeline of vehicles,” Mr Madra said. “In the future we’ll look at ways to improve the assets. Post this acquisition, we have the ability to leverage the expertise of Ford when it comes to supply chain and manufacturing.”
At the beginning of the year, Ford reorganised its Mobility group, including acquiring Mr Madra’s transportation start-up Autonomic. But January’s announcement of the move made no mention of bikes or scooters.
“The space is moving quickly,” Mr Madra acknowledged. But despite being dismissed by some as childlike or a fad, he believes that scooters may eventually help Ford launch driverless cars.
“We really think the learning that we’ll get and the trust we’ll continue to build with cities will continue to enhance our ability to be successful with our [autonomous vehicles] business. The permitting process and everything that’s happened with scooters is foreshadowing what’s going to happen with AVs.”
– Copyright The Financial Times Limited 2018