Critical Analysis - Ford Creating Their Own Niche in the Ride-Sharing Market

Daniel Kim

BA 3103

6/27/16

Professor Stein

Critical Analysis #1

The auto-maker, Ford, has been in the process of brainstorming a creative, new niche that they could squeeze into the already booming ride-sharing market. Ford is looking to find something that lands into the “happy medium” realm, that is bigger than a standard Uber vehicle, smaller than your standard transit bus, but also cheaper than an UberX. A few of the macro-environmental factors that face Ford in this situation are the pre-cautions/steps that Uber and Lyft (another ride-sharing app) take to make sure they stay on top, the development of autonomous and fully electric-run vehicles, the permission and approval to operate in major metropolitan cities, as well as the non-stop battle of the continual lobbying against ride-sharing apps. The micro-environmental conditions that face Ford in this situation are mostly logistical factors that need to be handled such as, “How much do you have to charge to lure a critical mass of riders? Do you charge by the mile, like a cab, or per ride, like a bus? Does the resulting network work best for short trips, or can it accommodate rides all the way across town?” (Badger, Pg. 3)

The biggest threat facing the organization, Ford, in this situation is their incompetence of being one step ahead of their competitors. The idea on surface-level isn’t terrible, however it isn’t innovative enough for them to create their own app to try and make a ground-breaking vehicle that will allow them to successfully compete with the two giants in the game, Uber and Lyft. The ride-sharing market has literally covered all aspects of transportation except autonomous cars (which will eventually be introduced) and buses/trains. Buses and trains have their own niche; they are in their own lane, so to speak. The entire concept of Uber and ride-sharing apps alike is to get people from one point to another, in the most efficient way possible. No meandering, no long waits, as well as the privacy of being in the back of a car to yourself or with your friends. “For the last eight months, Abernethy's group has been working on both the system that would match riders and vehicles through an app… the suggestively named Ford Transit, a commercial cargo van of varying sizes capable of carrying eight to 15 people.” (Badger, Pg. 2)

This idea sounds better than it actually is. If we look at it from an efficiency standpoint, it makes sense. Get a vehicle that carries more passengers than any Uber or Lyft vehicle has the capacity for while dropping everyone off in a common direction. However, when this is looked at from a practical standpoint, it doesn’t really work. First of all, Uber Pool and Lyft Line are already established with this idea; the only difference is that they hold less people at a time. There are situations with Uber Pool where the driver is incompetent and unable to effectively find one of the passenger’s destinations, leaving the other passenger extremely frustrated; mostly because normal people have time constraints on when and where they need to be. “Richard, the hapless man who’d been drafted to ride with me in my rideshare, was somewhere between a road closure and his hotel, and had been so for a comically long time. We couldn’t find Richard, and he couldn’t find us.” (Koebler, Pg.1) The biggest problem comes down to making sure everyone is happy. It’s obvious in life that you can’t please everybody, but Uber/Lyft have done a good job at making sure their partners (drivers) and the passengers get good compensation and good deals, respectively. However, with Uber Pool and Lyft Line, for the first time, the drivers are getting the short end of the stick. “As a driver, passenger pickup is the most stressful part of the job—there’s a large amount of uncertainty,” Vahtel said. By doing what are essentially two completely separate rides and getting paid only a couple bucks more than a what one normal UberX would pay, drivers say Uber is cutting down on the total possible payment.” (Koebler, Pg. 2) That is some insight from one driver reflecting on a ride where he’s only dealing with two passengers. Imagine the problems that would arise out of dealing with eight to fifteen.