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Ford exits vehicle subscription business
Ford Exits Vehicle Subscription Business

Ford exits vehicle subscription business

Ford has decided to sell Canvas, a subscription platform it acquired in 2016, to Fair, a startup providing a car subscription service. While many automakers started piloting car subscription services as an alternative for people who would need more time than carsharing pricing makes efficient but still don’t want to own a car, some have found the market response not so exciting. In late 2018, Cadillac also indefinitely paused its Book By Cadillac program (although, the company plans to relaunch it). Volvo ran into problems with car dealers because of its Care by Volvo service but still has maintained the program. 

According to Ford’s data, the service had 3800 customers, however most of them were looking for short term solutions and have canceled the service after several months. The company hopes to find a new program structure in cooperation with dealers. 

Curbing ride-hailing traffic

A new study by the University of Washington has demonstrated new ways that ride-hailing traffic can be curbed in major cities. Picking up and dropping off passengers can cause significant traffic delays in cities. The study used passenger load zones (PLZ) coupled with in-app geofencing for the designation of pick-up and drop-off areas. 

The study found that as a result of these methods, more drivers stopped near a curb, rather than in a travel lane. According to the researchers, geofencing and PLZs reduced the time for loading and unloading of passengers. And probably most importantly for shared mobility companies, passenger satisfaction significantly increased as a result of designated PLZs, rating of the curb experience as excellent went by 5% for pickups and 34% for drop-offs. 

How much does a mile cost?

A table of vehicle operating costs

Defining price for a mile can be a complicated process but often has an impact on many of our assessments, including the cost of owning a private car or as a component in price definition of car-sharing, ride-hailing or scooter-sharing services. Horace Dediu of Micromobility Europe examines the comparison of price per mile for taxis and micromobility options.

Internal Revenue Service of the US and Automobile Association of America define cost per mile as $0.53 (the number varies periodically). Of course, this is just the cost of driving and infrastructure and environmental impacts are offset through other taxes. As a side note, financing of infrastructural costs is quite a hotly debated topic in the US, as roads are financed through special trust funds. Several experts have proposed linking a special road tax to miles driven, however, so far it has not been translated into policy.  

Dediu points out that this is an average cost, but not all miles cost the same and some of them can be particularly expensive, for example, miles in an urban environment cost much more than those traveled on a highway as part of a long journey. For shared mobility businesses, like ride-sharing companies, the cost is even steeper since they have to account for other commercial costs. Dediu compares data from taxi and public bike sharing in New York. Not surprisingly, the comparison shows that taxis cost more per mile on short distances than bikes, but not on long distances: “Bikes rides are between 6 and 8 miles per hour and $.50 to $3/mi, while taxi rides will range between $5/mi and $18/mi in cost, and 4 mph and 11 mph”.

Micromobility Europe will be hosting a conference in Berlin on October 1st.

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