Google Parent Alphabet Leads $1 Billion Funding In Lyft

Ride-hailing app Lyft has secured a $1 billion funding round from CapitalG,  the investment fund run by Google parent Alphabet, as the company seeks to capitalize on the rise of on-demand as its rival Uber works to recover from its various executive controversies and turmoil of the past year.

In a blog post on Lyft’s site, the company added that CapitalG Partner David Lawee is being added to the ride-hailing app’s board.

The deal suggests a growing shift in favor of Lyft by Google, which is also an investor in Uber. The move toward Lyft comes several months after Alphabet’s self-driving car subsidiary, Waymo, began partnering with Lyft on autonomous vehicles. Alphabet and Uber have been involved in a battle over intellectual property over the development of sensors for self-driving cars during the past year.

And while Uber is still the number one ride-hailing service, despite being banned from London, Lyft points out that this past year has been very successful. In its blog post, the company notes that that its service is now available to 95 percent of the U.S. population — up from 54 percent at the beginning of the year.

“While we’ve made progress towards our vision, we’re most excited about what lies ahead. The fact remains that less than 0.5 percent of miles traveled in the U.S. happen on rideshare networks,” Lyft’s statement says. “This creates a huge opportunity to best serve our cities’ economic, environmental, and social futures.”

Lyft has also been aggressively courting marketing partnerships with brands such as Taco Bell. The two collaborated on a “taco mode” campaign this past July.

Before that, General Motors’ app-based Maven program, is now in about 20 cities across the U.S. and Canada, struck a deal with Lyft in Atlanta as the auto brand seeks to expand the year-old car-sharing effort. A year ago, Lyft and Jet Blue also partnered to bring travelers service from the airport their their door.

As the role of geo-data supports the connection between online and offline, the auto industry will be at the center of the changing interactions between places of business and consumers. And that’s what underlies this funding in Lyft right now.

Carmakers’ future success will be measured in “miles traveled” as opposed to the number of cars actually sold, Adam Jonas, head of global auto research for Morgan Stanley, has opined in a study of the impact of driverless and connected cars will have on the automotive industry.

By 2030, cars will drive more than 19.6 billion miles globally — considerably higher than the 10.2 billion they traveled in 2015, Jonas has estimated. It’s worth noting that the pace of growth is much higher than the estimated production of cars and light vehicles during the same period.

“The natural solution appears to be more shared vehicles,” Jonas said. “Shared cars—taxis and cars operated by ride-sharing companies, but not car rental—in 2015 accounted for 4 percent of global miles traveled, but by 2030, Morgan Stanley estimates that number could reach 26 percent.”

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Rental Car Brands Avis And Hertz Shift Gears To Self-Driving

As a range of car manufacturers like General Motors roll out more connected car features and evolve their approach to shared mobility, car rental brand Avis Budget Group and its rival Hertz are working to make sure they doesn’t get caught behind all the technological changes.

Like any other company that depends on getting its customers from one place to another, Avis and Hertz recognize they’re operating in the transportation industry, not just the car rental business.

So rather than follow once car manufactures like General Motors, with its growing Maven shared-mobility program, or Audi, which recently acquired airport-focused and app-based auto rental startup Silvercar, the two are starting to explore their respective options with self-driving cars.

On Monday, Avis signed a “multi-year agreement” to begin working with Google parent Alphabet’s Waymo autonomous vehicle experiment.

The Avis deal calls for the rental car company to support Waymo’s “growing” autonomous vehicle fleet as well as Waymo’s early rider program, a public trial of its self-driving cars in Phoenix, Arizona.

Waymo recently announced that it is adding hundreds of Chrysler Pacifica minivans to build a 600-vehicle fleet. This partnership will allow Avis Budget Group to service Waymo’s growing number of cars on the road, “ensuring Waymo’s self-driving vehicles are ready for riders around the clock,” the company said in a release.

“With members of the public using our growing fleet of self-driving cars, our vehicles need standard maintenance and cleaning so they’re ready for our riders at any time of the day or night,” said John Krafcik, chief executive officer, Waymo. “Avis Budget Group is an ideal partner to provide fleet support and maintenance. With thousands of locations around the world, Avis Budget Group can help us bring our technology to more people, in more places.”

“We are excited to partner with Waymo, the self-driving technology leader that is changing the mobility landscape in a profoundly transformative and beneficial manner,” said Larry De Shon, president and chief executive officer, Avis Budget Group. “Not only does this partnership enable us to leverage our current capabilities and assets, but it also allows us to accelerate our knowledge and hands-on experience in an emerging area as Waymo-enabled self-driving cars become available in the marketplace.”

Hertz Drives With Apple

Separately, Bloomberg News reported that Apple began leasing Lexus RX450h sport-utility vehicles from Hertz’s Donlen fleet-management unit in April, citing to documents released by the California Department of Motor Vehicles.

The Bloomberg report pointed to restive investors’ growing concerns about the role rental car companies will play in the autonomous vehicle future that appears to be fast approaching.

Even more than Hertz and Avis, Apple is also trying to keep pace with self-driving cars. With Amazon and Google ahead of the Cupertino company in powering voice-activated assistants within the connected home, Apple’s Project Titan, the name for its self-driving program, is perceived as lagging its rivals’ efforts in that area.

Still, Apple’s got a vastly different focus that might allow it to ultimately strike when the autonomous car moment is particularly hot. Instead of building its own autonomous cars, the company is mainly interested in providing the software that powers other brands’ vehicles.

In that sense, the race for the autonomous car is chaotic, and each brand is approaching it from the perspective of its own set challenges and strengths.

Avis’s Connected Car Commitment

Over the past year, Avis has struck a number of partnerships designed to allay those concerns and position it at the table for whatever shape the autonomous vehicle future arrives in.

Back in May, Avis touted its commitment to the connected car, saying that 50,000 more vehicles becoming fully connected by early 2018, more than doubling the number of connected vehicles in the Avis fleet. I

“This investment will bring the total of connected cars in the Avis fleet to nearly 100,000,” said Arthur Orduña, chief innovation officer, Avis Budget Group, at the time. “It will also ensure that we remain at the forefront of our industry and will bring us one step closer to realizing what we believe is the future of car rental for our customers.”

Roadmap To The Self-Driving Car Future

After Uber and Alphabet/Google stepped up investments in autonomous cars, traditional car companies and electronics manufacturers reacted quickly to form alliances and stakes in companies to ensure that they, too, don’t get left behind.

For most consumers at the moment, the idea of a driverless car still seems like science fiction — and along with the uncertainty of buying wearables, it’s not certain that people are clamoring for a virtual chauffeur. But then again, before the iPhone, how many people considered taking photos of themselves with their phones or pressing a button for food delivery and payment — or order a car service, for that matter.

As the technological hurdles are being dealt with on the road to the driverless car, a variety of major automotive manufacturers, electronics companies, and tech platforms appear all in on the idea of “if you build it, they will come.”

And for Avis and Hertz, along with all entities across the auto industry, if they’re not part of the building it, they’re likely to be stranded when the mainstream expectation fully emerges.

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How VR And Mobility Are Influencing Ford’s Marketing

When the Ford Motor Company made the leap into Virtual Reality in August 2016, its goals were firm and clear: this was not an experiment. It would not be a one-time ad campaign designed to “generate buzz” and then disappear. And Ford’s VR experience would not be housed on another company’s platform.

Ford, along with its dedicated agency, GTB, partnered with integrated production company Tool of North America, to create what they say is the “auto industry’s first dedicated branded VR app and recurring content series.”

“It wasn’t about selling vehicles,” said Lisa Schoder, Integrated Marketing & Media Lead at Ford, during a panel session with the company’s VR allies at the IAB Mobile Symposium. “This was more about building the brand. This was about telling Ford’s story of innovation in our products and engineering development.”

GTB’s Christian Colasuonno, Ford’s Lisa Schoder, and Tool’s Dustin Callif at the IAB Mobile Symposium

VR: It’s Where The Customers Are Going

The deep dive into VR reflects Ford’s recognition of where potential customers are consuming content. Plus, it reflects the desire to move to a mobile-first strategy,” Schoder said.

“The VR app made sense for us as a way to pursue original storytelling through  in a thoughtful way,” she said. “We avoided thinking of this as a ‘one and done.’ This was about building a new channel for us to distribute content on.”

The first piece of featured VR content during the launch was the story behind the Ford GT’s return to the 24 Hours of Le Mans, 50 years after the car’s original victory. The underlying message of the content was to showcase “the power and efficiency in Ford’s EcoBoost engine” as well.

“On top of sharing virtual reality stories about our innovative products, we are also looking to bring mobility issues to the forefront,” Schoder said at the time of the launch. “As we expand our business to be both an auto and a mobility company, we are pursuing emerging opportunities through Ford Smart Mobility.”

From the final installment of the Gymkhana NINE virtual reality and 360-degree video series.

Initial Results Are Strong

The idea for focusing on VR as a branding tool had been “kicking around  the agency for a while,” said Christian Colasuonno, director of Digital Production at GTB.

For example, at another IAB conference last year,  MINI USA’s Lee Nadler showcased that car company’s use of VR as well. The  main goal was not just to share arresting visuals. He wanted to demonstrate that, even though “VR isn’t mass yet,” the ability of immersive, 3D visuals are able to lift brand favorability by 11 percent after generating 4.2 million views.

For Ford, the initial results of its VR efforts were even stronger. The VR experience for Ford’s participation in Gymkhana, the Australian and New Zealand motorsport race, last October drew over 17 million-plus views, as well as drew widespread coverage from media outlets both general and automotive-focused.

During the IAB presentation, Dustin Callif, Tool’s managing partner, noted that Schoder started her career on the engineering side and then moved to marketing.

“The story we’re telling is how that reputation for performance can be stepped up into something larger for the brand,”Callif said before turning to Schoder. “Is [this use of VR and mobile] analogous to the relationship between the auto-enthusiast books and the mainstream advertising were back 20 years ago? Is this an advanced version of that?”

“Maybe,” Schoder responded. “At least in the way we approached it, if we were saying we wanted to deliver stories with the Ford brand onstage, those key moments are in our performance portfolio. And we also knew that when we dug into the audience insights with our performance fanbase, we knew they were largely into tech and identify as early adopters. Now, we’re looking to go beyond performance to see what other stories we can tell to a broader audience.”

Smart Mobility And Connected Cars

Following the panel, we caught up with Schoder and asked her about other emerging channels that can offer both a branding experience as well as drive performance to local dealers.

While the IAB panel discussion was about the role of Ford’s VR app as a branding and content distribution tool, does Schoder see VR as something that can work at the local dealership level to create an omnichannel experience intended to drive sales?

It certainly could be,” Schoder told GeoMarketing. “This particular app was initiated to build brand stories. We’re also looking at VR within the shopping experience. It could provide education about new features, for example, ‘How do you experience the all-new Expedition from the inside-out?’ That is certainly a part of how we might approach the overall use of the VR technology.”

Aside from VR, Ford is also exploring ways of using voice-activated, artificial intelligence-powered digital assistants like Alexa or Siri or Okay Google as part of a wider smart mobility strategy, she noted.

“We want to understand how to work with Amazon on Alexa, so that if someone asks a question about one of our cars, they can have the right answer, the best answer for them,” Schoder said. “We are already working with Amazon on our connected vehicles and see how Alexa fits into what we’re doing and what our customers want. For example, it would be exciting for someone to say, ‘Hey Alexa, start my car.’ The car is a piece of the Internet of Things ecosystem and we want to explore all of it.”

 

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