DETROIT — Pouring tens of millions of dollars into a venture that shuts down roughly two years later would be considered a poor business decision based on the auto industry's traditional thinking.
But automakers say they can't afford to think that way anymore.
Ford Motor Co. said this month it would close the Chariot shuttle service it bought in 2016 by the end of March after suffering from a lack of riders, but executives view the short-lived business as a necessary learning experience as they vie with Silicon Valley startups as well as their usual rivals for an edge in the emerging mobility sector.
The swiftness of Ford's decision to pull the plug on the failing service is a sign of how it will manage forays into electric bicycles, scooters and other forms of transportation moving forward. It underscores the speed and uncertainty of decision-making in what some call Auto 2.0.
"One of the things we've recognized is that we're going to have to try a lot of things," Executive Chairman Bill Ford said in a fireside chat during industry preview days of the Detroit auto show. "If it's not working, don't hang on to it and wish it were different. Deal with reality and move on. We hope not to fail — we want everything to work — but that's just not reality."
Ford reportedly spent $65 million to buy Chariot. It was among the first big bets placed by Jim Hackett when he was chairman of the automaker's Smart Mobility subsidiary before becoming the company's CEO in 2017. After the acquisition, Ford expanded the San Francisco service to Austin, Texas; New York; Seattle; Detroit; and the United Kingdom.
But in August 2018, Streetsblog NYC branded the service " a big, expensive failure," using company-provided data to show that each of its vans in New York was averaging just five riders per day.