Here’s How Ford Motors Can Benefit From Its Partnership With Lyft

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Recently Ford Motor Company (NYSE: F)  announced a new partnership with ride hailing company Lyft which is aimed towards bringing more self-driving cars to the mass transportation segment. Through this partnership Ford is looking to leverage the customer network of Lyft and pair it with its autonomous vehicle technology to build self-driving vehicles for fleet services. This partnership will enable Ford to understand the technology requirements to integrate its vehicles with a ride hailing app which can effectively dispatch a car “on demand” to a customer. Further the company will also be able to identify markets where this service can be launched, based on the customer demand. Ford is also looking to analyze infrastructure requirements to maintain a fleet of autonomous vehicles through its partnership with Lyft.  As the company focuses on technology to drive its next wave of growth, we believe this strategic alliance with Lyft can give Ford a clear business plan and road map for its autonomous vehicles.

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Building A Profitable And Viable Self-Driving Vehicle Business

While several companies are building autonomous vehicles, government regulations in various countries are less likely to allow a fully autonomous vehicle in the near term. Further, experts believe that consumers are less likely to own self-driving vehicles but are more likely to use them in the form of ride hailing or ride sharing.  This trend has led automakers to partner with ride hailing companies to offer them their vehicles which will eventually have the technology to be “called” via an app and will “automatically drive themselves” towards the customer. Ford’s competitor General Motors has already partnered with Lyft and taken a strategic stake in the company. Ford’s partnership with the ride hailing company now ensures that Ford has a clear road map to build a profitable and viable autonomous vehicle business since it has identified the market and its partner to develop the right technology. As the automotive landscape changes, customers are less likely to own cars and will depend on a network of fleet cars which will eventually become autonomous. While automakers are focused on these vehicles they need to have a viable strategy to build a profitable business out of these new technology vehicles and a partnership with the ride hailing companies is crucial to achieve this goal. Ford’s partnership with Lyft will help the company do this.  While the partnership is not exclusive and Ford is likely to be “one more company” offering self-driving vehicles to Lyft’s network, it gives Ford a clear road map in this segment.

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