Last January, Ford was widely expected to announce an alliance with Alphabet's (GOOGL) - Get Report Google, possibly in the area of autonomous driving. Ford never acknowledged the talks officially; last month, Google and Fiat Chrysler (FCAU) - Get Report announced an agreement under which the automaker will build driverless prototypes for Google.
Ford, in the mean time, has created its own app, FordPass, that manages the ownership of a Ford automobile and soon will allow a user to share the car with others and to earn a fee after the vehicle is left at an airport. The details still are sketchy. Two months ago, Mark Fields, the automaker's chief executive, said, "We're thinking through all of that right now. It's very wide open."
Ford spokeswoman Angie Kozleski called Ford's approach to digital mobility ventures like car sharing "holistic," proceeding simultaneously in several directions. "There will be more news soon," she said. Kozleski said Ford is testing "various car sharing and other transportation solutions" in London and elsewhere that could evolve soon into a larger commitment.
Ford isn't ruling out the possibility that it could make a large acquisition or forge a major alliance with a software maker. Like other automakers, Ford is under pressure to understand the challenge to the industry posed by Google and smaller firms in the sharing economy that exemplify Silicon Valley's software advantage over Detroit's hardware.
The game is far from over since Google's cars haven't come to market while Apple (AAPL) - Get Report has demonstrated little beyond saying it has interest in making autos and placing an investment in Chinese ride-hailing venture Didi Chuxing. Until an automaker brings a breakthrough technology to market, it's too early to say whether Ford or any automaker is ahead or behind. Only time will tell which automakers forge the best alliances and execute the best strategies.
FordPass was developed with the collaboration of Pivotal, a Silicon Valley software company. Ford earlier this month said it had invested $182 million in Pivotal. Analysts have said Ford is quietly developing "internal capabilities" as well, exemplified by a recent announcement of renovations of its Dearborn, Mich., campus meant to attract talented millennials with digital expertise who might otherwise seek employment on the West Coast, Boston and Texas.
Meanwhile, Toyota (TM) - Get Report made a "strategic investment" in Uber, the terms undisclosed, and Volkswagen (VLKAY) invested $300 million in Gett, an Israeli startup aimed at taxis and other fleets-for-hire. Shahar Waiser, Gett's CEO and founder, said VW's investment would allow the company to expand its business in New York and move into more cities.
The widespread acceptance of smartphones and the development of new software that melds mapping, communication and scheduling to organize the location and availability of vehicles is upending many long-held assumptions about mobility.
Regular users of cars may not need to be vehicle owners. Owners could be owners of large fleets operated for the benefit of users. Taxis won't necessarily be rendered obsolete if they can match the service of companies like Uber and Lyft, which late last year accepted a $500 million investment from General Motors (GM) - Get Report . Automakers are scratching their heads, wondering how they will fit into the changing landscape. Will they serve as operators, sellers to operators or something else?
Bill Ford Jr., Ford's executive chairman, sees the writing on the wall and isn't prepared to cede anything: "In Michigan and Detroit, we have more engineers here than any other state. We have a huge customer base here with (automakers) and tier one suppliers, and this should be mobility central. Not Silicon Valley. Not Austin, Texas. Not Boston."
Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.