En route to destination: Mobility-as-a-Service (MaaS)

Once upon a time, you had to spend days on the road with a horse and a carriage, looking for a suitable place to park them, feed the horse while fixing and maintaining the carriage and finally replace them after a few years with an upgraded model. When you really needed to get somewhere, something would always go wrong.

Today, the world is moving towards a Mobility-as-a-Service (MaaS) model where it is no longer necessary to own a means of transport to commute with or maintain. All you need is a smartphone. When you need to travel from A to B, simply use the phone app to order your preferred mobility service.

But how does this work in practice? Where does this development come from, what has already been set up and what still needs to be done to really offer the end-to-end journey to travelers as a complete service?

Let’s find out!

A bumpy start

Up until 10 years ago, if you wanted to go across town you were largely left with the choice of public transportation or taxis.

The Mobility-as-a-Service (MaaS) model refocuses the service on users to offer them an end-to-end journey, and with that approach, it is profoundly changing the way urban transportation systems are viewed. For the past few years, MaaS has indeed been considered the best solution to answer travelers’ needs for a seamless and efficient experience.

Cities also see MaaS as an opportunity to increase their livability and attractiveness. In Europe specifically, the idea has captured the imagination of cities wanting to reduce congestion, pollution and carbon emissions in order to enhance the attractiveness and livability of their city. They view MaaS platforms and apps as powerful enablers for encouraging commuters to walk, cycle and take public transports rather than use a car.

The environmental angle is important to consider, as transportation contributes as much as 20.1% of global CO2 emissions ^[1]. If cities - or businesses looking to improve their ESG outlook - want to cut down on this pollution while retaining a strong transportation network, then MaaS is one of the best solutions available.

Particularly in 2020, a MaaS solution would also enable cities to manage social distancing and trace infections during pandemics. This sanitary context has increased the need and willingness to both share mobility data, and the use of micro-mobility solutions, like bikes and scooters, for more safety.

The concept of MaaS further appeals to startups and big tech companies that understand the business opportunities of creating digital platforms with a large user base. Revenues associated with electric vehicles, autonomous vehicles and MaaS are expected to increase tenfold by 2030.

European legislation is opening a highway to MaaS solutions. In the framework for a ‘multi-modal travel information service’, in 2017, the EU commission adopted a new Directive providing for the creation of a National Access Point by December 1st, 2019 in each EU country. The goal was to share both static and dynamic travel data to any citizen through, among others, databases, web portals and data repositories.

As well as being driven by policy makers, there is momentum from commuters faced with expensive and inconvenient car ownership in urban areas where transport operators and startups are expanding the range of alternatives, like scooters or car sharing.

The first MaaS platform

The first actual MaaS platform was launched by Whim Global in 2016. Since then, numerous MaaS initiatives and companies have emerged around the world.

However, despite the first few optimistic years of effort since that initial launch, MaaS has not really taken a sprint. The key barrier remains how to find a sustainable technical, operating and business model that makes it possible to overcome the challenges raised by the collection of various mobility services, while also providing a seamless user experience.

But the ecosystem is in the making: besides MaaS being a response by the local authorities to offer alternative forms of mobility as mentioned earlier, MaaS is also attracting the interests of multiple players like transportation operators, IT and telco companies, energy providers, banks and insurance companies. Even the likes of Google ^[2].

Paving the road to MaaS

While the motivation to implement the MaaS concept is there, much of the innovation over the past eight to ten years in this area have only been about bringing a lot of mobility options online or updating systems that were already too old to allow for any sort of external integration.

As a consequence, much of the mobility revolution has stayed siloed ^[3]. That said, the fact is that we cannot deny the MaaS concept any longer. By trial and error, the need to offer connected services is recognized, and with that, mobility innovation is entering the ‘integration’ phase.

An example of a company that understands what this means, is Europcar: their car rental and car sharing services are enabled to integrate existing MaaS platforms.

In an interview with AirPlus International they further elaborate on this: “We are open to this, because our vision of mobility is open and collaborative. But we can also become a MaaS ourselves, to some extent. We already have a wide range of mobility services, with brands such as Europcar, Goldcar and also Ubeeqo, the leader in round-trip car-sharing. In addition, we already have an ‘on demand’ approach, 100% digital, with Ubeeqo, and we are thinking about extending this value proposition, this great accessibility, to our other brands.”

"We already have a wide range of mobility services, with brands such as Europcar, Goldcar and also Ubeeqo, the leader in round-trip car-sharing. In addition, we already have an ‘on demand’ approach, 100% digital, with Ubeeqo, and we are thinking about extending this value proposition, this great accessibility, to our other brands.”

- Europcar

The trend in the next decade will also be about the integration of local, regional and national infrastructures. There will be the need to learn how to duplicate some of what an airport offers, from bag check to security, away from the airport and in the city as more people want to take an air taxi straight to the runway. 

In order to do so, more airlines are going to have to figure out how to interface with new forms of mobility and vice versa. The company Landline is tackling this, building out the infrastructure for baggage handling, security checks, integration into the airline’s booking system and more, so that they can sell the likes of buses, trains, and flying cars.

Air taxis are the perfect symbol for the merging of local and national -- a local form of transportation, the taxi, and a form of transportation like air travel that is synonymous with long distance airlines, becoming one.

This new form of integrating services also applies to existing players who serve as examples of blurring the lines between urban and national. Rappi, which started as local food delivery, is launching Rappi Travel. BlaBlaCar, normally regional carpool, has launched collaborations with scooter companies.

Another successful example of regional coverage and integration is Enterprise – who has been selected as the car rental partner for the GO-HI MaaS project in the Highlands and Islands region of Scotland.

They describe this in an interview with AirPlus International: “Our current MaaS projects and pilots are all focused on decarbonizing leisure and consumer travel by encouraging a shift to shared motoring, public transport and active travel, combined with providing incentives so that individuals owning much older polluting vehicles have access to better travel options.”

“Our current MaaS projects and pilots are all focused on decarbonizing leisure and consumer travel by encouraging a shift to shared motoring, public transport and active travel, combined with providing incentives so that individuals owning much older polluting vehicles have access to better travel options.”

- Enterprise

Enterprise continues: “Residents and tourists can book Enterprise Rent-A-Car and Enterprise Car Club vehicles through the easy-to-use GO-HI app, as well as access a range of other shared transport options across the region. GO-HI provides instant access to information on buses, trains, taxis, car hire, car clubs, bicycle hire, air travel and ferries. This allows users to plan their journeys and then to select, book and pay for all modes of transport all in one place using any iOS or Android mobile device.”

More use cases will follow as ‘mobility’ becomes a more encompassing term as some new, more general Online Booking Engines are expected to emerge from regional and local platforms.

A good example of this is Gett, a corporate transportation company, launching its corporate travel booking engine and focusing less on their own rides and more on integrating a diverse number of ride options to build a platform for corporate traveler’s needs - it recognized that serving a multinational wasn’t just about innovation, it was also about integration. It couldn’t possibly cover every market itself.

Arriving at the junction of mobility services

With the observation that integration is crucial, the timing now gets better and better for intermediaries in mobility since their integration services are being requested more and more as well. 

The examples mentioned earlier prove this development. Another case that can be added to this is Viator, which sold for 200 million USD after 20 years of building out the first activities booking platform. Now, a series of intermediaries are seen who tackle the integration problem pop up, from Redeam to Indie to TripAdmit.

For a long time, many MaaS players have been struggling. Businesses like Whim/Maas Global, Trafi, Transit, Citymapper, Moovit and others have often been restricted to launching route planning/transit apps, selling data as a service or working through city specific partnerships with municipalities. This resulted in too many local transit agencies not being able to get plugged in and too many local taxi or rideshare companies that didn’t bother to develop an API.

The tide is now turning. Over the last year, we have noticed an increased focus by mobility service companies - whose strategy previously was to just spend their resources conquering a new market - to start putting resources into their APIs.

There will be regional and sector champions that will ultimately need to integrate with each other – mobility service companies will start refashioning themselves as platforms with a balance of ‘in house’ and outsourced services.

Heading into the right direction of future mobility

With mobility maturing, this trend towards integration will increase and with the industry getting more and more onboarded and accessible, the role of the integration businesses as intermediaries will become crucial for Mobility-as-a-Service to succeed in offering an end-to-end journey experience to users.

Further accelerating the maturity will depend on the ability to mutualize funding, to find alternative sources of financing, and to create innovative and strategic partnerships.

With travel and mobility players having hit the road, it’s now important for them to notice and join those on that road with them to reach the same destination together.

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[1] https://www.statista.com/topics/7476/transportation-emissions-worldwide/#dossierKeyfigures

[2] The Future of Mobility as a Service (MaaS)- Which model of MaaS will win through? | Capgemini/Invent/Autonomy paper, Dec 2020 

[2] The intersection of travel and mobility requires all to look outward | Phocuswire.com