What are the forces behind the Mobility as a Service (MaaS) revolution?

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MaaS is worth trillions of euros and global names like Toyota, Daimler and Deutsche Bahn are pumping in money, so what is MaaS and where has it come from?

If you live in Helsinki, then by now you’ve probably heard of Whim, you may have hailed a ride using Uber and you might have made money renting out your car with Kortteliauto, now called Blox Car.

“Fine” you’re thinking.

But what you might not have realised is that by using these services you’re already just as much a part of the mobility as a service revolution as the founder of MaaS Global and Finnish transport pioneer, Sampo Hietanen.

There are a number of important factors that have shaped the rise of the concept of mobility as a service, not least the need for more choice, and as residents of Helsinki we have a unique perspective with which to talk about the changing face of transport on demand.

I say that because Helsinki has one of the most well-known integrated transport platforms, Whim, and is something of a poster child of the MaaS movement which is springing up in cities around the globe.

When Samtrafiken was shaping the Swedish Mobility Programme they invited Finland’s Blox Car to be part of the whitepaper working group and strategy workshops, which was something of a coup for the status of Finland’s mobility revolution.

Today there are ground-breaking services and pilots integrating in MaaS apps around the world, from car-sharing to bike-sharing, from Boston to Vienna. The choice and frictionless nature of the concept is enough to make any commuter’s eyes water with excitement.

This brief guide to mobility as a service will surface the reasons why the MaaS concept has emerged and talk about the trends that will accelerate it in 2018. I’ll also share some international successes that I’ve encountered as CEO of Blox Car.

Introduction to MaaS

In last week’s post about car-sharing innovations I introduced Whim. Since 2016, Helsinki residents have been able to use the Whim app to more easily get around using a variety of different modes of transport and one payment method.

That’s the crux of Mobility as a Service – or as MaaS is sometimes described, “the ecosystem of personal mobility”.

Rather than having to visit the apps or websites of different transport providers, the objective with MaaS is to bring everything together under one roof and provide seamless transition from one service to another.

In reality that means you might begin your journey by tram, then switch to train and then pick up a shared car from the railway station and continue to a client meeting.

To achieve this you would pay just once using your mobile phone, or maybe you’d be basking in a warm glow having already paid for all three modes of transport in advance.

3 reasons for the rise of mobility as a service (with international examples of MaaS)

#1 More than ever people want convenience and expect on-demand service.

A streaming service like Netflix is a good example of how consumers’ habits have changed in the way they search for, watch and buy media. Now mobility as a service is fundamentally altering the way people move around their cities and choose and pay for different transport services.

Japan probably has one of the earliest examples of best practice in this regard, where the East Japan Railway Company has operated the prepaid and contactless Suica card since 2006, enabling payment for trains, subways and buses as well as other everyday purchases.

In Finland, Helsinki Regional Transport’s decision to remove ticket purchase on trams and trains – while controversial – is part of something bigger than the sum of its parts. The vision of the future that underpins it is traveller-centric: more convenience, fewer ticket purchases, and smoother transitions from one mode of transport to another.

People’s expectations of more choice and less friction in their daily lives has forced improved service delivery. As a result, a MaaS infrastructure often combines public transport with private. A good example of this is from Quebec, Canada, where local transportation authorities have offered mobility packages that include bikesharing by BIXI and carsharing provided by Communauto. Meanwhile in Finland, Blox Car will this spring launch its car-sharing service in the Whim app and provide more choice and convenience for capital area residents.

Consumer expectations of convenience and frustration with the price and service of traditional taxis and car-rental firms are often touted as one of the factors that fueled the rise of global giants, Uber and Lyft, associated with mobility as a service. And a new era of raised expectations is nowhere more evident than in the ratings system of Uber drivers.

Frustration with traditional provision also goes a long way in explaining the rocketing trajectory of peer-to-peer carsharing services.

When you’re travelling you sometimes get stuck; public services might run dry, and it’s these gaps that mobility as a service is plugging. You might get to the end of the railway line and prefer to collect a prepaid rental bike for the last 5 kilometres rather than order and wait for a taxi.

These days people aren’t so much, “I’m a car guy” or “I’m a public transport guy”. They demand convenience, they’re less dogmatic. They just want to move and have everything paid for automatically or in advance.

#2 People want to access and pay for shared cars, bikes and taxis with the same ease as a tram or bus.

Attitudes to car sharing have changed dramatically in recent years from 11,000 vehicles in sharing platforms and schemes in 2006 to 104,000 vehicles in 2014.

In 2006, 350,000 people were members of car-sharing platforms globally and membership rose to almost 5 million by 2014. By 2024 it’s expected that there will be more than 23 million members.

Private companies and city authorities have bought into the public’s appetite for convenience with successful bike schemes everywhere from London to Helsinki. Now bicycles are becoming part of MaaS platforms, like UbiGo in Sweden.

City planners and governments know that they have to connect these services to public transport to keep up with public demand for accessibility and a pliable transport experience.

People want to use these shared cars and borrowed bikes, but they need to be handy and they need to be available to purchase in the same place as other transport services. Non-networked forms of transportation don’t meet the needs of the modern city inhabitant, hence the growth in MaaS.

Seen in the numbers, car sharing is these days a viable and very flexible alternative to car ownership and whilst car ownership is still popular it is a less attractive option than it used to be for many people because of gridlocked cities, expensive or impossible parking and the high cost of car ownership.

One of the chief drivers of peer-to-peer car sharing in my experience is environmental concerns. Adding more cars to the roads is not an attractive idea for many modern city dwellers and so borrowing someone else’s car when you need it is considered a much better option.

On top of all this, sharing economy success stories like Airbnb have convinced people that sharing prized possessions is a convenient and easy option and for renters it also a unique experience, which is highly sought these days.

#3 Cities want access to the millions using private transport services and to upgrade the travel experience.

Cities and municipalities are beginning to understand that to achieve a unified transport network it’s in their interest to work with the many transportation services that have sprung up to plug gaps or complement the existing public provisions.

One fine example of public-private cooperation is in Singapore where the government shares anonymized data with private operators to create on-demand bus routes. Prices are little over a few dollars more than public transport for what is in many ways a journey of personal convenience.

A more unified transport solution in the mode of MaaS improves city life and gives cities access to a wider user base thanks to the information sharing that takes place under MaaS platforms. It also provides better value for commuters and can reduce gridlock on the heaving roads of cities swollen by migration.

MaaS is generally considered to be an enabler for a transport experience that is easier, faster, cheaper and more efficient and by cooperating with numerous small-scale providers offering services such as on-demand bus routes, ride hailing, peer-to-peer car sharing, parking space sharing, carpooling, and bikesharing, city authorities hand the benefit to residents without having to raise capital to develop these services themselves.

In the age of global city branding it’s essential that city life is not stuck in the past but utilizes multi-modal solutions to help citizens, shorten journey times and improve city livability.

Author

Paul Nyberg

So much is going on in mobility as a service and car-sharing that it’s hard to keep up. Follow Paul on LinkedIn or sign up to test his new Car-Sharing platform if you want to stay ahead of the chasing pack.