For so-called “traditional” automakers, Detroit’s Big Three have spent considerable resources over the past few months upending their conventional business models.
General Motors has purchased self-driving start-up Cruise Automotive and invested $500 million in ride-sharing company Lyft. Fiat Chrysler Automobiles has partnered with Google to build autonomous minivans. Ford created a subsidiary, Ford Smart Mobility, to house its future-minded projects, and invested $182 million in Pivotal, a software company that could speed development of connected cars.
Ken Washington, Ford’s vice president of research and advanced engineering, has helped shape the strategy for both the parent company and the new subsidiary. Since joining Ford in August 2014, he has brought a big-picture outlook to the job. Previously, Washington, pictured below, led Lockheed Martin’s space technology advanced research and development lab.
Recently, he sat down with Autoblog to talk about self-driving cars, emerging alternatives to traditional car ownership, and the future of transportation, as Ford sees it. Here’s what he had to say:
Q: Why did Ford create a separate company earlier this year to house these projects and experiments?
KW: We’ve been doing experimentation and pilots in these spaces, and as we did that, and realize as these things grow up and you try to build a business model around them and figure out how to scale, bring in partners and resource them appropriately, doing that within the boundaries of our current company and being part of this innovative ecosystem is going to be hard. So we thought it was the right move. Separated but connected. We wanted to get the best bang for our value and be connected so we can flow insights from customers back into our core business as well.
Q: In developing so much internally, Ford has taken a different strategic approach than some of your competitors who are either acquiring companies or finding external partners. What’s appealing about this setup for you?
KW: This was a direct outcome of our very intentional approach to take our time to get it right. We’ve been fairly deliberate about exploring the space and the options. There’s a lot of ways to move people around – car sharing, peer-to-peer sharing, car swapping, vehicles on demand. There are a lot of things. City buses. Bikes. There are many options, right? That led us to focusing on a couple of specific things.
“Twenty years ago, maybe they couldn’t do that. But the tools are here today. You can easily collaborate on the use of a vehicle via an app, or track who is using their fair share.” – Ken Washington
Q: What’s the most promising? What are you most excited about?
KW: The first is the notion of flexible ownership, and within that a couple of things stand out as really showing promise. Flexible shuttles in that middle space between personal car use and public transportation. We’re doing an experiment right now with shuttles and routing algorithms through experiments in London and Dearborn. The other thing is ride-service opportunities – that comes in lots of flavors. The one we’re most excited about is a little ways away, but we see the business potential in enabling people to ride when they don’t want to drive, with app-enabled capability that will hail a vehicle that’s autonomous.
That’s why so much of our development effort is in Level 4 vehicles, where drivers are fully out of the loop. That’s why it’s important to enable a ride service in this category of flexible vehicle use, and why you have to do the hard work of developing Level 4 autonomy, which requires a lot of testing and validation and a lot of work on hardware and software.
Q: What sort of timeline do you see that developing on?
KW: We think it will be technically possible in defined regions, in the right environment by 2020.
Q: That’s Level 4 by 2020?
KW: Level 4, we think that will be possible.
Q: And when you say defined regions, is that campuses?
KW: It could be a city environment too.
Q: What needs to happen to make Level 4 happen that fast?
KW: The key is it’s an environment that you have mapped. We are mapping areas right now. We’re also looking at ways to enable the mapping to be accelerated. Right now, we have to drive the area. To map Austin, you have the drive the streets of Austin. We’re prepared to do that, but there are lots of streets in a lot of cities, so we’re also looking at other methods. It’s too early to talk about this, but the reason I mention it, it’s an area we’re looking to innovate in order to enable the future that we envision.
Q: Does Ford’s autonomous research and that mapping, does that stay under the main company or does that come under the umbrella of the new subsidiary?
KW: Autonomous is still part of the core product development team that I’m responsible for. Autonomous vehicle development includes virtual driver systems, and the components of those, that will be a resource to the LLC to enable this ride-service business.
Q: There’s a ton of activity at the federal level in terms of considering policy and regulations for autonomous vehicles. What does the Department of Transportation need to do to enable this environment to work?
KW: There’s a lot in that. At a high level, the most important is there needs to be ongoing conversations and dialogue with the entire industry. We believe it’d be a mistake for any one automotive OEM or competitor, or a tech company like Google or Uber, to drive the conversation alone.
We think the industry needs to have a conversation as an industry with the policy makers around the issues, the regulations, and the rules of the road. Do you need a license to ride in an autonomous vehicle? Is it OK to not have controls? Under what conditions is that OK? There’s a long list of questions that need to be answered.
“So it’s unclear to us if it’s a sustainable model with a driver. But we’re not dismissing that either.” – Ken Washington
Q: That question about the need for controls is a controversial one. That’s obviously Google’s intent. … It sounds like your approach falls more in that line of something like a Google car that doesn’t have controls.
KW: The Google concept, as I understand it, is a Level 4 vehicle where drivers are fully out of the loop, and that’s our vision of enabling a ride service and a personally owned vehicle, at some point, perhaps starting with a luxury-class vehicle like a Lincoln. But our ultimate goal is to make it available to everyone, because our philosophy is mobility for all. That’s been our viewpoint going back to our founder, and now we’re applying it to autonomous vehicles. Our design will be across the Ford lineup, starting with the ride service, and going to luxury and ultimately across the full lineup. That’s our long-term vision.
Q: With that goal in mind, how do you bring down the costs associated with autonomous and multiple LiDAR sensors and things like that to make autonomous affordable for those mainstream customers?
KW: We’re looking at ways to lower cost of those LiDARs. We buy ours from Velodyne, and Velodyne and others are working on that technology. They recognize this is a business opportunity and they’re all working to shrink the cost of those components. One thing we’re excited about is the potential of solid-state LiDAR, and that could lead to a very low-cost LiDAR. We’re not there today. They’re not as capable as the scanning LiDAR. It’s not clear which path will lead to the ultimate low-cost LiDAR we put on a production vehicle. That’s why we’re working on multiple fronts. Our lab at Palo Alto is leading that research. It’s a question of which technology will win, and we don’t know yet. We’re doing research on all fronts.
Q: What is that middle ground of personal and public transportation experiment that started in London?
KW: It started in London with some research. That research pretty clearly told us if there was an efficient shuttle service that could be routed dynamically and it was outfitted in a manner where you gave people a comfortable, personal space, that people would love it. That research was loud and clear. That led to a few prototype vehicles, and we also chose to implement that pilot on our own campus in Dearborn as well. That’s underway right now. The results, so far, are pretty promising, and telling us a really exciting potential business model exists, and we could potentially take it to multiple cities and introduce it at some scale. People would love it, and it’d be a really good business for us.
Q: General Motors announced its car-sharing service, Maven, earlier this year. Broadly, do you see ride sharing and car sharing as competitors? Or are they two complementary parts in a bigger ecosystem?
KW: Great question. They’re two modes of flexible vehicle use. And there are others, like shared ownership. You could have three to six people owning the same car. There are multiple modes you can use flexibly to get from Point A to Point B, and today you have choices like Uber and Lyft, and you also have the choice of driving, but not in a car that you own. That’s car sharing. …
We did a pilot in London where we had over 50 cars in service, operating in 25 hubs in the broader London region and we’ve learned from that people really enjoy having a vehicle they can use by the minute, where they use it by the minute and they know they can get where they’re going without the hassle of looking for parking. All the fees associated with a congested environment – gas, parking, insurance – are bundled and easy to pay with one click. People really like that. So I don’t think they’re competitive in that sense. There are cases where people want to drive for things associated with their daily routine – go shopping, go to the store, to the park, to pick up a friend. Ride-sharing services might be less convenient for those things. But going from office to office in a congested city, that’s a much better model for ride sharing. So I can see the two coexisting with each other.
Q: For ride sharing to take off as a business, does it have to be autonomous? Uber and Lyft are seemingly doing well currently with human drivers.
KW: It’s not clear how profitable or sustainable of a business it could be if you have drivers in the loop. If you just extrapolate the volume of need as cities grow and more cities reach levels of 1 to 10 million people and beyond, the demand for ride-sharing vehicles and flexible ownership could pretty easily outstrip the available drivers in a model where you pay the driver, in a way that encourages them to be drivers. So it’s unclear to us if it’s a sustainable model with a driver. But we’re not dismissing that either.
Q: What are you hoping to learn with the fractional ownership experiment in Austin?
KW: There are cases where a long-term use might be desirable, but may not be affordable. Particularly as you are in that phase of life of college or starting a family, and you’ve got close family or friends in your circle and they all have that same need for vehicles that are not used a lot. They’re on the road 5, 10 percent of the time. So we’re hoping to learn if it’s feasible for groups of three to six people who know each other well to agree to share a vehicle through a lease program. That will cut their costs, and that usage could be well within that 5 to 10 percent they’d use, if they can work out the scheduling. It’d be up to them to work that out.
Twenty years ago, maybe they couldn’t do that. But the tools are here today. You can easily collaborate on the use of a vehicle via an app, or track who is using their fair share by having connected devices in the vehicle. You’ve got that mobile phone that ties to a person. So the tools to make it easy to enable that sharing exist today. We’re hoping to learn that, if we supply those tools, will people come? Will they enjoy it? If it’s a yes and yes, that might be good for society and good for the people. It might reduce congestion. It might bring new people to the Ford brand.