From car owning to ride-sharing: how MaaS could change the way we travel
by Albert Serra, Jordie Verstappen, Valeria Devaux & Laszlo Bax
Of all the potential initiatives currently being discussed to reach sustainability targets, tackling the number of privately-owned cars currently clogging the streets of Europe’s cities remains one of the most straightforward. This will mean a new mobility ecosystem, part of a larger, interconnected, urban vision. Mobility as a Service (MaaS) is integral to this vision because it aligns both existing and future modes of transport in one cohesive strategy.
MaaS is a new mobility business model, relying on a digital platform that integrates various forms of transport services into a single on-demand service. Such a service would mark the shift from privately-owned vehicles, from the idea of owning a means of transport. Instead, transport would be consumed, as needed, as a service. Ideally, this would lead to fewer cars on the road, meaning less congestion and with a much a smaller demand for parking, freeing up space in cities for pedestrians and cyclists. There is, however, also a risk that robo-taxis (self-driving cars) will overrun our streets in the near future, leading to even greater traffic problems.
Owning, maintaining or even simply driving a car has already become almost prohibitively expensive and inconvenient in big cities., especially for younger generations. Meanwhile, older generations are also realising that their cars are stationary, parked for more than 90% of the time 1. This begs the question of whether or not owning a car is even worth the hassle and expense. Particularly now that there are many companies offering cheap and straightforward car rental on-demand services, called car-sharing. With so many urban households only using their cars a few times a year, the costs of maintaining the vehicle, per trip, shoot up. There are huge financial savings to be made in switching from being a car owner to a shared car renter/user, sharing the costs with fellow users. Shared costs also make newer (and more expensive) technologies more accessible – electric and/or autonomous vehicles would no longer be too expensive to implement. Improved access and greater implementation can only spur the development of these emerging sustainable technologies.
The variety of existing car-sharing business models can cover all mobility needs of users now covered with private cars, both in terms of trip purpose and trip distance and by offering the possibility of choosing different kinds of vehicles. Automation could be the turning point technology for many private vehicle owners to stop owning vehicles and instead, start using shared vehicles.
But even in a market with a high rate of MaaS uptake, owning a private car could still remain a popular choice, particularly in underserved areas such as urban suburbs and rural areas. However, with expensive autonomous vehicles coming into the game, fewer people will be able to afford to have private ones. For this reason, many people giving up their own old private cars will probably switch to shared autonomous mobility services.
But it will not happen overnight, a long transition period is expected before reaching full autonomy. During this transition period, different levels of autonomy will enable different use cases and vehicle types. Automation levels 3 and 4 will not be truly disruptive and we will still recognise mobility by car (shared or private) as very similar to what it is today. But, once automation Level 5 comes into play, the real disruption will happen.
As the business model of ride-hailing is today disrupting the more traditional taxi model and car-sharing doing the equivalent to traditional car rental, the final stage of automation development will converge into the robotaxi model, where shared autonomous cars will autonomously pick-up and drop passengers on-demand without the need of drivers. This is expected to start happening in most innovative cities from 2030.
This phase marks the beginning of the adoption of MaaS, when the offer is still very new and transport remains fragmented. MaaS is yet to be established in the market, which is why it has so far only been adopted by a small portion of the society, the modern users.
At this stage, most of the resources are spent on research and development.
Three main drivers have evolved to bring MaaS into the mainstream: business models, technology and policies, and the ability to satisfy user needs.
MaaS is being increasingly adopted by transitory users. The market will be characterised by rapid growth, supported by governments’ regulatory push. Moving briskly towards full market acceptance, MaaS presents a good intermodal integration offer. The focus will shift to making it so convenient for users to get around that they give up their personal vehicles for city commuting, although a considerable number of people still rely on private cars to get around.
By this phase, MaaS is adopted by almost all society. There is a clearly defined, strong competition among the major players in the market, fueled by constant improvements in autonomous vehicle technology. Most of the resources are now spent on improving the services offered and making them cheaper. At this point, MaaS is a digital platform that integrates end-to-end trip planning, booking, electronic ticketing, and payment services across all modes of transportation, public or private. A fully autonomous scenario will transform business models; one example being the distinction between car-sharing and ride-hailing will no longer exist as both modalities will converge.
For MaaS to succeed in substituting private vehicles, it will have to meet the needs and expectations people have come to expect after generations of privately owning vehicles. But it isn’t enough for MaaS to simply match the owner experience, it should also solve the pain points private vehicles present. One clear advantage will be the real-time information that feeds into the decision of how to get from point A to point B, tailored to the specific needs of the traveller. To reach its full potential, MaaS will have to feature in cities’ long-term urban planning as an integral part of public transport, ensuring a comprehensive overview of all the possible options and combinations. The behavioural change needed is disruptive enough. To solve the trade-off between individual needs and public interest, MaaS needs to be as convenient and straightforward as possible for the end user – perhaps symbolised in a single ticket or app. MaaS will also have to meet the cities’ overarching goals, working towards greater sustainability and inclusivity, building more people-centric urban spaces. Unfortunately, as it stands, MaaS is still very fragmented, not yet fulfilling the needs of all potential users.
Existing car-based MaaS business models include:
With so many options, it’s easy for cities to feel overwhelmed. Bax & Company‘s proprietary model simplifies the decision, identifying the most appropriate approach for each city’s specifications by running simulations. The model even goes further, investigating the potential success of individual business models within a specific MaaS ecosystem. The insights gleaned from exploring the many different scenarios are strategically valuable to MaaS providers and consumers alike. If cities can embrace the MaaS model and effectively integrate it, the benefits for people and planet (not to mention the city’s budget) will not be far behind.
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