Home Apps The death of car ownership and the rise of MaaS

The death of car ownership and the rise of MaaS

17 min read

We’re on the verge of a huge shift in the way we travel. Ownership was long considered the pinnacle of societal ranking – and in some ways, still is. Buying a house or a car has traditionally been seen as a rite of passage, a way to mark one’s success. But things are starting to change. In the current economic climate, renting has become the norm for younger people and buying a car is beginning to seem like a waste of money when more and more of us are living in cities. A survey of car manufacturing bosses by KPMG found that 74% of executives thought more than half of car owners today would not want to own a vehicle in the future. Sharing economy companies like Uber and Airbnb have taken advantage of this change in mindset.

It is a shift we are seeing most clearly within the transport sector. Because of the move towards other mobility solutions, up to one in ten new cars sold in 2030 could be a shared vehicle, predicts a report by McKinsey; which could reduce sales of privately owned cars. Transportation in general is looking to be the next major revolution in society, and Mobility as a Service (MaaS) is going to be the catalyst to push us over the edge. MaaS describes the idea that we’re moving away from privately owned modes of transportation and towards consuming transportation solutions as a service. This will be enabled by blending both public and private transportation providers across multiple modes of transportation, and providing a single-access interface or app for managing trips. MaaS has the potential to transform our society by changing the way people and goods move from place to place over the next few decades.

It is already a brave new world out there. More and more car clubs are popping up, bike sharing is becoming increasingly popular, and autonomous shuttle buses are being trialled, not to mention the surge of investment in driverless cars we’ve seen in the past year. In December, French automaker Renault SA bought a stake in a media company, already preparing for a future in which driverless cars are just another vehicle for entertainment (no pun intended). All of these things have started to fundamentally change the fabric of cities, so it seems only a matter of time until MaaS is the main transportation model across the country and people abandon their own cars.

So what are the key areas of consideration?

Open data

Being able to utilise open data has enabled MaaS to become a huge factor for urban development. It has a big impact across a number of areas, including the uprise in the sharing economy, demographic changes, urbanisation, electric or autonomous vehicles and mobile technology. But in order for MaaS to truly become a reality, there must be access to accurate and timely transit data that reflects the real-life customer experience as closely as possible.

Imagine booking a multimodal journey on a MaaS app in the future, and being dropped off at a train station by a ridesharing service. If the train is significantly delayed or cancelled, the promise of MaaS falls apart. The information used routinely by most transit authorities is currently designed to manage the movement of vehicles alone. In order to ensure a seamless journey across multimodal, multisector transportation solutions and be able to participate in newer transportation innovations, authorities will need to move away from providing operational level data, to providing passenger level data.

The evolution of the ecosystem

MaaS blends the data of many different systems that make up a transport ecosystem. It is predicated on the idea of people leaving privately-owned transportation for shared transportation, providing better convenience and accessibility while reducing congestion and emissions. If all transportation options were available in one place, people would most probably use them more frequently.

For example, if you were visiting Manchester over the weekend, a Zipcar service might serve you well; yet you might not want to sign up with them and download a new app just for a couple of days. If the service were an option via your MaaS application however, it could be something you would be happy to use.

For such a scenario to become likely, the transport ecosystem first needs to fundamentally change – once reliance on cars is reduced, MaaS will be able to thrive. There are many factors involved in this, such as trust in the public transport system, ease of bike/car sharing networks, and improvements to the current infrastructure. But the success of all of these hinges on data. MaaS will bring together the data for all these modes of transport into one easy to use platform or app. However, if we look down the road another 10 years, we can see that cities will have to evolve in order to accommodate the coming revolution in transportation technology.

The obvious next stage

Journey planning app providers like MaaS Global and Moovit are moving towards becoming all encompassing MaaS platforms, introducing aspects such as the option to buy tickets for transportation services directly within their apps. However, this can only be accomplished if they have relevant, rich and accurate data available from all the relevant sources. To work properly, MaaS is going to require public and private companies working closely together. Private companies have taken the lead so far, but it looks likely that we’ll see an increasing public sector and operator presence in 2018.

We’re already seeing private sector businesses working on a variety of solutions that can augment existing services and fill gaps in the public transportation network. Chariot, owned by Ford, offers pseudo-scheduled bus services in various US cities (with plans to begin operating in London) that are based on passenger demand. For example, they could have a service running only during peak commuting hours in one location and move to another location where demand is high during other times of the day; thus ensuring that their buses are always full and operating where people want them. Earlier in 2017 we saw Citymapper start its own night bus service, as well as launching a partnership with Gett for a shared taxi commuter route. Many of the mobility organisations providing these types of services make extensive use of data to determine the best routes and times of day in which to operate.

Additionally, new car sharing and car club businesses are entering the market at an incredible pace and, of course, the arrival of autonomous vehicles will greatly impact the provisioning of transport services.

Cities, and in particular transit agencies, are realising that they have to engage better with private organisations in order to stay relevant. This means they have to deliver higher quality data that can be more easily integrated with other transportation providers.

All of this will have very large implications on how cities are planned. The future is increasingly pointing us towards shared, electric, connected, and autonomous solutions from both public and private organisations.

What is holding MaaS back?

MaaS still faces challenges before it can take of over the world of urban mobility. Public transportation agencies are uniquely well positioned to augment their existing bus routes with demand-based systems since they have a lot of data related to usage patterns; however, embracing this type of approach requires innovative leadership and a much stronger data-driven mindset. Existing public transportation providers and automotive manufacturers are not the best equipped to leverage technical innovations to their advantage. These are typical conditions for disruptive innovation, where it’s very difficult for incumbents to change their business and operational models to adjust to new threats and opportunities.

Moreover, not all companies feel sufficiently incentivised to share their data openly. For private providers, there is often an inherent fear about the possibility of losing proprietary IP. Private mobility providers are making significant investments in mining data to predict demand, set real-time pricing, and more. This data could even be considered their main strategic asset in some cases. Manufacturers are trying to better understand customer behaviour via connected cars and, increasingly, semi-autonomous vehicles. All data generated is still viewed as proprietary and there are no current forums for sharing it between manufacturers; even for seemingly non-strategic data assets related to safety, such as hazardous road conditions. There is still uncertainty about how the market will evolve, so many companies are being conservative and holding on to all data assets in case of future opportunities.

So we still have a ways to go in terms of a fully fledged MaaS network, but the wheels have been set in motion (pun intended). Car ownership is dying, and Mobility as a Service will rise from its ashes.


Johan Herrlin – CEO of ITO World

Johan Herrlin is CEO of ITO World, experts in public transport data management and data visualisation. Johan’s vision is to enable the smarter movement of people by providing real-time transit data and visualisation software for urban mobility, Mobility as a Service, journey planning and transport planning.

Johan is one of BusinessMaas’s top Mobility as a Service influencers, see him here.

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