Ford plans to address commercial applications like package delivery with new fleet.
Ford CEO Mark Fields announced that the automaker is developing a commercial fleet of self-driving vehicles set to hit the road in 2021, with plans to address commercial applications such as ride-hailing and package delivery, according to a release.
“The next decade will be defined by automation of the automobile, and we see autonomous vehicles as having as significant an impact on society as Ford’s moving assembly line did 100 years ago,” said Mark Fields, Ford president and CEO. “We’re dedicated to putting on the road an autonomous vehicle that can improve safety and solve social and environmental challenges for millions of people – not just those who can afford luxury vehicles.”
While Ford didn't announce specific plans for those services, it did announce investments in four different technology companies it's working with to deliver on this vision. And given the opportunities in retail as the competition for cheaper, faster, and more convenient ordering and delivery options escalates, Ford might just have the right idea.
“The first application of the fully autonomous vehicle will be commercial applications, whether it’s ride-hailing or parcel delivery,” Fields said, according to Recode. “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.”
The services would be provided initially in urban areas before being scaled up to other regions, Ford’s vice president of research and advanced engineering Ken Washington told Business Insider. The vehicles can only operate within a geo-fenced area that has been mapped previously with Ford’s autonomous vehicles, limited its range, at least initially.
Using self-driving cars for delivery potentially could automate the last mile of distribution, bringing down costs and reducing the complexity of the operation. This has been an area where many retailers have struggled, with many startups struggling to find the right approach. The package delivery market is already shifting quickly to new models, via new express delivery options, smart lockers or e-commerce retailers that want to do their own shipping. Perhaps delivery via driverless vehicle is the ultimate next step.
