FutureStructure

Ford's Group-Leasing Pilot Edges into Future-Facing Shared Ownership Concept

The automaker plans to test a program at three dealerships in Austin, Texas, where groups can jointly lease a vehicle — an idea that strikes at the heart of a few futuristic transportation trends.

by / January 13, 2016
Ford Credit Link will offer shared vehicle leasing, as well as an application that lets a group of people coordinate use of a single vehicle. Ford

One of the largest automakers in the U.S. wants to test the waters of an economic model that just might be the future of transportation: shared ownership.

Ford announced Monday, Jan. 11, that it’s trying out a program in the tech-centric Austin, Texas, where customers can band together in groups of three to six people to jointly lease a car. Using a “vehicle plug-in device and app,” the group will be able to schedule times when each person needs the car, keep up maintenance and view account information. Leases will last 24 months.

The program is called Credit Link, and Ford is trying it out at three of its Austin dealerships.

“We’re seeing the potential for a shift from a single consumer paying for a single vehicle to several people sharing costs and benefits,” Ford Credit Executive Vice President of Marketing and Sales David McClelland said in a statement. “Ford Credit Link makes Ford vehicles more readily available to people who may not want or need their own vehicle but have mobility requirements that must be met.”

The company thinks the model might be useful for people who live in a house with multiple drivers, friends, co-workers, college students and neighbors who periodically need a certain kind of vehicle like a pickup truck.

The idea taps into the concept of the personal car as an underused resource. In September 2015, the consultancy McKinsey and Co. noted in a mobility-themed white paper that most cars sit idle 90 percent of the time, stored away in garages and parking lots while their owners are going about their lives. Essentially, cars aren’t benefiting anybody for the vast majority of the time they’re around.

A few companies have tried to capitalize on that realization by finding ways to put cars to work at times they would otherwise be unused. Car2Go offers a fleet of cars that users can find via smartphone app, drive to a destination and then leave for another person to use. Getaround lets car owners “rent” their vehicles out to people who use them temporarily, covering the insurance risk for the vehicles listed.

And in 2012, BMW took a stab at car sharing, but with a different angle than Ford: In the San Francisco Bay Area, the automaker launched a program called “DriveNow” that attempted to set up a network of shared electric vehicles. Because parking permit regulations didn’t allow the program to operate successfully, however, BMW suspended the program.

Ford’s shared leasing model also strikes at a cord some people think will grow stronger with the advent of the autonomous vehicle. Many of the companies working toward self-driving cars — especially those in Silicon Valley and San Francisco, like Google, Uber and Lyft — envision a world where people can ditch personal vehicles in favor of autonomous vehicles that can take them where they need to go according to a schedule or digital ride-hailing. That model, like Ford’s group leasing idea, involves risk- and cost-sharing.

The model as it relates to AVs is in possible jeopardy for near-term adoption in California, where the state Department of Motor Vehicles has proposed regulations that would require a licensed driver to sit behind the wheel of all self-driving cars ready to take over. The regulations are in draft form, and a powerful few, including Google and the state’s lieutenant governor, have pushed back against the idea. But in Texas, where Ford is launching its group leasing pilot, there are no such regulations — nor any legislation supporting the creation of regulations, according to the National Conference of State Legislators.

“Austin is a progressive city with a rich demographic mix. It has effective public transportation, and consumers who use various mobility options but may not need a full vehicle lease to meet their transportation needs,” McClelland said in the statement. “This combination makes Austin a good place to test Ford Credit Link.”