Mobility as a Service

May 2018

Clearly, the automotive landscape is changing; papers are littered with articles on automotive vehicles, blogs are bursting with posts on alternative fuels and there's been a deluge of conferences discussing 'the future of the car'. But there is one aspect which has, until recently, taken a backseat in the discussions of modern travel — Mobility as a Service (MaaS).

By definition, MaaS is the integration of various forms of transport service into a single mobility service, available on demand, delivered via a digital platform. This can range from bike sharing schemes like London's 'Boris Bikes', to well-known taxi and car hire services, such as Uber or Lyft, which enable consumers to seamlessly access, utilise and pay for multimodal mobility services, both private or public. Translated into a relatable scenario, it could mean ordering an Uber to the nearest train station, before picking up a hire-bike and completing the last leg of the journey on foot, all via one app.

From a customer viewpoint, services are selected on the best value proposition; cost, convenience, personalisation and accessibility. Consumers are offered two types of payments; monthly subscription, or pay-as-you-go, with the latter appearing in most of the more mainstream models. Pay-as-you-go is self-explanatory, with the user paying for each leg of the journey as they travel. Subscription services are based on the so-called 'Netflix' platform, with consumers paying a monthly fee to utilise a pre-set amount of services per mode.

Currently, MaaS is generally on the periphery of public consciousness, but global interest is growing as the concept captures the attention of both UK public and private sectors. In fact, digitally-enabled car-sharing and ride-hailing services are predicated to be the biggest disruptors to the current car ownership dominant mobility model. By 2030, it's expected that revenues from mobility services will reach almost $1.2trillion, with little growth in private car sales1.

So, what's prompting this (potentially) seismic shift towards MaaS, and how can OEMs make sure that they're leading the way, rather than eating their competitors' dust? 
Although there is yet to be an 'en masse' move towards MaaS, it's clear that there has been a rise in the popularity of service-style mobility, as newer generations place less importance on owning material goods in favour of 'experiences', particularly in an increasingly urbanised environment. As cities expand, both the public and public policy makers are seeking to create mobility solutions which facilitate a flexible transport system to suit the evolving needs of the population. Uptake of ride-sharing apps has been unprecedented, with Uber extending its reach to more than 500 cities in more than 70 countries since 2012, demonstrating that the consumers are incredibly receptive to new mobility options and services. 

This is compounded by the inevitability of autonomous vehicles appearing on our roads — the UK government announced that it aims to have driverless cars on our roads by 2021. In fact, a government commissioned report identifies the mass introduction of driverless cars as the 'catalyst'2 for accelerated expansion of MaaS across the UK. It's estimated that fleets of 'robo-taxis' will be 40% cheaper than human-driven cabs, prompting an increase in their use by infrequent or reluctant motorists, and those living in areas poorly served by public transport.
How Can OEMs Remain Competitive?
The prospect of a dwindling private-car-owning population may be an uncomfortable prediction, but OEMs are in fact, strongly positioned to dominate the MaaS market when it eventually becomes widespread. An expertise in mass vehicle manufacturing, in conjunction with supremacy over autonomous vehicle production, powerful distribution networks and global brand presence make OEMs a smart choice for a national MasS deployment - especially by government regulators.

There is a general consensus that although MasS might initially migrate into the public sphere via private innovators, it will inevitably fall under the remit of policy makers as they navigate (or influence) public mobility patterns. Through strategy, investment in customer-centric policy and innovation, OEMs must position themselves suitably to become first choice for collaboration with public authorities, transportation bodies and within the limitations of infrastructure, by adapting their business model in line with customer demand.

With customers potentially drifting towards a preference for accessibility rather than ownership, the shift creates new opportunities for OEMs to monetise the consumers' user experience and capitalise on new revenues. Expectations will be high — exceptional connectivity and personalisation will be standard — and OEMs must guarantee a seamless user experience to attract and retain this new breed of consumer. Forging new partnerships with technology and mobility companies will be key in unlocking potential value.

But, OEMs can't afford to rest on their laurels — there are already a number of companies gearing up for the mass move to MaaS. Toyota is investing over 10 million euros in Finnish-based MaaS Global, as well as forming a $100 million Al-focused venture, General Motors is affiliated with Lyft and Uber itself is investing in creating autonomous cars which will be crucial to widespread MaaS distribution.


2 service/written/82018.pdf