Ford Motor Co. said it would establish a Palo Alto subsidiary to build and invest in new mobility options, including car-sharing and ride-hailing services, while General Motors Co. said it had acquired Cruise Automation, a small software company that has been testing self-driving vehicles on the streets of San Francisco.
The move comes as Tesla has been adding more self-driving features to its cars, and Alphabet has been testing autonomous prototypes on US roads.
GM, which plans to test autonomous Chevy Volts later this year, would absorb Cruise into GM’s new Autonomous Vehicle Development Team.
Cruise would function as an independent segment of the AVDT and remain in San Francisco.
Ford Chief Executive Mark Fields said its subsidiary, Smart Mobility, would also have offices in Ford’s hometown of Dearborn, Mich. The idea is to make it “separate but connected” to its parent.
The research and design of autonomous vehicles and vehicle connectivity will remain with the parent company, he said.
Smart Mobility will be chaired by former Steelcase CEO Jim Hackett, a member of Ford’s board since 2013. Hackett resigned his board seat Friday to lead the new company. Ford plans to name a chief executive in the near future.
Ford has already conducted more than 30 global transportation experiments over the last 14 months. They include GoDrive, a car-sharing program with guaranteed parking in London, and Bridj, a van service in Kansas City, Mo., that users can summon with a smartphone.
GM said it plans to use Cruise’s technology and its people to accelerate plans to launch autonomous vehicles, potentially as part of ride-sharing fleets.
The major automakers are facing a huge shift in car-buying patterns as fleet purchases diminish in response to ride-hailing services such as Lyft and Uber.
Self-driving technology is perceived to be a wave of the future, with automakers racing tech giants such as Google in a bid to develop viable automated vehicle that will win consumer acceptance.
GM has in January announced plans to invest $500 million in ride-hailing service Lyft as part of a longer-term partnership that makes the automaker “a preferred provider of short-term use vehicles.
The automaker also formed Maven, its own own ride-sharing car service, in January and bought much of Sidecar, a ride-hailing startup that struggled to compete with Uber and Lyft.
GM shares were up 1.1 percent in the stock market today. Ford rallied 1 percent, and Toyota gained 2 percent. Tesla was up 0.8 percent, and Alphabet climbed 1.1 percent.
Ford has also begun testing autonomous vehicles and said that it was the first to test them in the snow. Like GM, the company plans to muscle in on the Uber set, by launching car-sharing services in the U.S. and in London.
Autonomous driving has drawn significant interest from the tech sector too. In addition to Tesla’s and Alphabet’s work, Apple is also reportedly developing an electric vehicle with self-driving features.