By James Datson, senior technologist, Mobility as a Service, Transport Systems Catapult (TSC)
Looking at the transport landscape in 2017, it is clear we are in the midst of technological revolution which will fundamentally change the way we travel.
Talk of autonomous cars is now commonplace, Hyperloop is presenting an alternative to rail travel and the digital revolution which has already swept the retail and media sectors is now becoming embedded in our transport experiences.
We have seen the rise of ride-hailing apps and car-sharing schemes as well a huge growth in the use of smartphone apps to help us travel. Many of us make our travel plans online and rely on our smartphones for directions and travel information.
In turn, this is creating a large amount of data which can be used to enable new transport solutions and to better understand us as consumers of mobility.
The way people expect to receive and interact with goods and services has been transformed by smart technology – people not only expect internet access wherever they go, but also expect to be able to stream high-definition movies wherever they are, for example.
For young people, mobile technology has become the de-facto method for socialising and staying connected with friends and loved ones – we are now much better connected.
Mobility as a Service
For many, especially the younger people in society, there is a growing expectation that transport should fit into the digital ecosystem and this is triggering the development of a new kind of transport business model – Mobility as a Service (MaaS).
MaaS involves the provision of transport using digitalisation.
This could look like travellers buying contracts similar to those we have for mobile phones which cover minutes and data usage – but instead will offer packages of travel mileage or minutes on multiple forms of transport.
It’s easy to see how a ‘pay as you go’ or a subscription service could become attractive for many of us who currently choose to own and travel in a car.
These MaaS offers will aim to allow you to travel seamlessly between transport modes based on your unique circumstances.
In this scenario, you would simply use an app to select a destination and desired time of arrival.
The app would do the rest, booking train tickets, taxis, driverless vehicles and even e-bikes before presenting you with a step-by-step itinerary and a door-to-door cost.
These contracts are likely to look very different based on individual needs.
For instance, a rural MaaS contract may offer the lease of a vehicle most of the time, but include access to public transport for journeys into urban areas.
Meanwhile, a London MaaS user package might include additional modes of travel already covered by the capital’s Oyster pre-payment system and include the offer of a car when travelling out of the city.
Connected and autonomous vehicles will likely be well suited to the MaaS model, allowing car travel to be included in packages for people without driving licences and managing the supply of driverless vehicles so they are in the right place at the right time.
This idea helps to illustrate that there may be a blurring between traditional notions of ‘public transport’ and automotive.
The popularity of vehicle leasing and hire purchase schemes, compared to buying vehicles outright, means the idea of paying monthly for transport needs is familiar to many (and commonplace for business users).
However, the extent to which consumers perceive their day-to-day costs of vehicle ownership and how they will feel about the value of emerging MaaS offers remains to be seen.
Business Opportunities and Challenges
In the MaaS ecosystem, MaaS providers sit between the customer and the transport operator.
This position reflects that of the platform business model.
A key challenge for MaaS providers is to achieve the necessary supply and demand into the platform; supply of transport operators and demand from consumers of mobility.
There are clearly opportunities in this space for fleet management companies who are already providing vehicles as a service to their clients – they have on tap a significant level of demand for mobility.
They also have the opportunity of supplying and managing fleets of vehicles on behalf of MaaS providers.
Alternatively, fleet management companies could become the aggregator of other transport services and take on the role of being the MaaS provider themselves.
The other opportunity in the MaaS ecosystem is for fleet managers to become data providers by offering a brokerage service that supports the transactions of value in the ecosystem between the transport operators and consumers.
Then there is the question of when will MaaS become mainstream?
Answering this depends on your perspective of what MaaS means, what it should look like for consumers and what it should look like to policymakers.
On the commercial side, how the use of platform business models can offer benefits to the market in terms of digitalisation is important to model.
The redistribution of consumer spend on mobility is difficult to predict and finding win-win outcomes is vital to bringing together transport operators to work together to grow their businesses.
Questions of who ‘owns’ customer data are there to be explored, questions of consolidation in different layers of the MaaS ecosystem will also be interesting to examine.
And of course, what MaaS does to traveller behaviours is of key interest to transport policymakers because MaaS could increase or decrease congestion on the road network.
Fleet managers should embrace the opportunity to be part of MaaS. They have opportunities to offer their business clients better value.
They have the opportunity to remove pain points from travellers, and their access to vehicles means that where public transport can’t be competitive, the use of cars as a service can be provided.
Finding partnerships where win-win outcomes are likely is key, and engaging with policy makers to ensure the right infrastructure is in place to support new ways of using cars is vital; an obvious example is ensuring that on-street parking for shared vehicles is available.
The public sector as a large employer, significant generator of travel demand and large user of car leasing services also has a great opportunity to help stimulate the MaaS market.
Councils, the NHS and other large employers should embrace the potential of MaaS and use open innovation approaches to support new business models and evaluate how they work against social and commercial objectives.
This could be a great way of attracting more investment and greater innovation in MaaS in the UK.