Mobility As A Service To Change Lives

Mobility As A Service To Change Lives

Automotive | Jun, 2019

Over the last half decade, rise of innovative transportation services transformed the travelling experience.  Ride hailing giants like Uber, DiDi, Lyft and Grab, among others need no introduction and ride hailing market still continues to be a game changer in the mobility service. Innovations such as self-driving or autonomous vehicles are gaining momentum in automotive industry but Mobility as a service (MaaS) is gaining ground. As of May 2019, google showed over 367 million search results on mobility as a service, and several state governments & private transport providers are focusing on capitalizing this idea.

What Will Shape the Future of Transportation in Cities?

The share of people using ride hailing service services has grown with an unprecedent rate in the past few years.

According to TechSci Research report “Global Ride Hailing Market, By Vehicle Type (Passenger Cars, etc.), By Service Type (E-hailing, etc.), By Internet Connectivity (3G, etc.), By Vehicle Connectivity (V2V, V2I, etc.), By Company and By Geography, Forecast & Opportunities, 2017-2023” the global ride hailing market is projected to grow at a CAGR of 21% to reach $ 136 billion by 2023, on the back of growing popularity of ride hailing services as well as the service providers such as Uber, Didi and Lyft. Moreover, surging demand for ride hailing services on a global level can be attributed to ease of booking, enhanced passenger comfort, rising government initiatives aimed at increasing awareness regarding the harmful effects of air pollution levels and development of semi-autonomous and autonomous vehicles. Increasing number of partnerships between domestic and international service providers, such as Uber and Didi in China, are further expected to aid global ride hailing market during the forecast period.

However, this is just the beginning to major disruptive idea, i.e., Mobility as a service or mobility on demand, which will transform and combine every possible mode of automotive and improve the convenience of travelling.

Plethora of Option to Choose From / Convenience is at the heart of MaaS

MaaS or mobility as a service is a concept about providing tailored travelling experience to users with the use of all possible mobility solutions like ridesharing, cycling, walking, taking the bus, catching the train, driving, riding as a passenger, taxi, renting a car, carsharing, bike sharing, ridesharing and ride sourcing. MaaS combines mobility services from public transport, taxis, car rental and car/bicycle sharing under a single intuitive app that is accessible from a smartphone. Mobility as a service is regarded as the next big thing in the mobility as it can bring both public and private transportation under one service.

Why the growing interest in MaaS?

According to the UN, the urban population of the world grown rapidly from 2.858 billion in 2000 to 4.2 billion in 2018, i.e., 55% of global population and is anticipated to account for 68% by 2050. The population living in urban cities is expected to increase in the forthcoming years, consequently, increasing trend of urbanization is expected to worsen the existing problem of traffic congestion. Streets in the cities are a finite and scarce resource. With the burgeoning population and increasing vehicle ownership, there is need for planning our cities. However, we need not just to plan our cities but their mobility too.  MaaS can be used to address the issue of traffic congestion as it can make efficient use of the existing public and private fleet.

  • Efficient utilization of vehicles for mobility will ultimately help in minimizing parking space used per person. Additionally, reduced traffic will also result in shorter commuting time and diminished need for parking space due to lower vehicle ownership.
  • Public transport operating in various cities has already switched to or planning to switch to renewable source driven public transport fleet. By involving public transport in the MaaS, air quality can also be improved by using sustainable modes.utonomous or self-driving car are expected to be the real game changer in the transportation industry. With several pilot projects in test by major automakers such as Tesla, Audi, BMW alliance, among others in various cities, across the world, this new trend is expected to define the new standards of commuting.  Autonomous cars could help to reduce the cost of the MaaS as around 45% cost of operating any ride hailing vehicle is directly related to the driver, thus, eliminating driver will further reduce the cost of commuting.  Major e-hailing giants like DiDi and Uber realize the potential of self-driving cars and are collaborating or launching self-driving vehicles in major cities across the world.

 

Current Status Of MaaS Models

Helsinki, Finland, is the first city to implement the concept of mobility as a service. Mobility as a service, which is often regarded as the urban mobility, offers service in the city using Whim app. The application helps to plan and pay for all modes of transportation including train, taxi, bus, car share or bikeshare in the city.

In 2018, Whim started operations in West Midlands which is the UK’s second largest metropolitan area. The mobility as a service model started offering ‘pay as you go’ and monthly subscription plan for bike sharing, on demand taxis and public transports such as tram and train.

Major companies operating in the mobility as a service market include UbiGo, Whim, Moovel, Mobility Shop, Hellogo, Didi, among others.  For implementation of mobility as a service, several players are venturing into MaaS, which is driving the growth of global mobility as a service market.

MoD or MaaS?

Mobility on Demand (MoD), unlike the MaaS, is a concept given by the US department of transportation, based on the principle that transportation is a commodity. It focuses on offering access to services, goods and mobility to consumers through an integrated network. The transportation modes can be distinguished in terms of journey time, wait time, convenience, cost and other factors. Generally, MoD and MaaS and used interchangeably; however, the European concept of mobility as a service focuses on subscription services and passenger mobility.


According to TechSci Research report “Global Mobility on Demand Market Forecast & Opportunities, 2022” the global mobility on demand market is projected to cross $ 228 billion by 2022, on account of growing traffic congestions, continuous initiatives being taken by several vehicles manufacturing players and increasing inclination of consumers. Asia-Pacific region accounted for the largest share in global mobility on demand market in 2016; and China and Japan registered more than half of the demand for mobility on demand services in the region in the same year. Moreover, the region is anticipated to maintain its dominance in global mobility on demand market during the forecast period as well.

Is MaaS a Game-Changer Mobility for Australia?

In the next ten year, Australia is expected to be home to over 36 million people with 75% of the population centered around Perth, Sydney, Melbourne and Brisbane. On account of increasing population in the country, the vehicle ownership is also growing at a drastic rate. Only in 2018, the country witnessed sales of 1.15 million vehicle and the market is growing at an impressive rate in the country. Currently, several e-hailing, ride sharing players are operating and offering mobility option. When compared with 2015, smartphone users in the country grew by 14.7% and the number is likely to reach 19.27 million by 2022. Increasing mobile phone internet users backed by surging demand for smartphones are contributing to the growing share of ride hailing companies in Australia.


          

In order to address issues and ensure smooth transportation services, Australian government is also working on the Smart Cities Plan, which is a visionary plan by the government with focus on infrastructure of cities, implementation of smart technologies to improve the sustainability of the cities and drive innovation.

In order to overcome challenges such as mobility, accessibility, CO2 reduction and to provide real time data and information, Smart City Council has come up with strategies for Perth, Adelaide, Brisbane, Melbourne and Sydney.

However, for MaaS ecosystem, data is a key element as interconnected fleet of shared and driverless vehicles and sharing of real-time data won’t be possible without it. Moreover, there is requirement for regulatory and governance framework for the inclusion of public and private transport in the mobility as a service. How the businesses will work together, and fares & subscription will be shared with individual service provider is another challenge to overcome for the smooth function of MaaS system.

The country with the assistance of third-party platform, has introduced MaaS in Melbourne and plans to extend it to other cities as well. Australian iMOVE Cooperative Research Center (CRC) consortium is collaborating with SkedGo to start app-based multimodal transportation ecosystem in Sydney. MaaS major, Whim, also considers Australia a lucrative location for starting operation and plans to launch by 2020 backed by favorable policies and presence of technical infrastructure. Various cities such as Sydney, Brisbane, among others in Australia have open data platform that can help to offer insights on the travel behavior and help to build a unified integrated solution for transportation services with the assistance from private and open data sources.

 

Author: Mr. Ruchit Mahendru, Research Manager, TechSci Research

Mr. Ruchit Mahendru is a management and strategy consulting professional with over 8 years of experience. Mr. Mahendru has been instrumental in developing and implementing business strategies for many automotive companies. He has extensive experience in advising clients to identify and tap unearthed opportunities for its clients to lead rather than following competition.