This article was originally published in the TSC’s 2017 Imagine Brochure, which can be read in full here
Today’s consumers expect their transport needs to be met with the same flexibility as their other lifestyle requirements, and businesses and policy makers who deliver on that vision stand to gain
Digitalisation has transformed industries as diverse as banking and media – and next up is transport. Leading innovation is the Mobility as a Service, or MaaS business model. The Transport Systems Catapult (TSC), which published its Exploring the Opportunity for Mobility as a Service in the UK report last July, describes MaaS as “using a digital interface to source and manage the provision of
a transport-related service(s) which meet the mobility requirements of a customer”.
In short, one-size-fits-all is no longer an option. Today’s transport user expects services that suit their circumstances and align with their lifestyles.
James Datson, who heads the TSC’s MaaS programme, and was lead author on the report, envisages two future MaaS growth models: firstly, the Cars-as-a-Service model, currently dominated by app-based ride hailing companies, which offer easy access to vehicles, eliminating the need for ownership; and, secondly, what the TSC describes as the Intelligent Mobility (IM), scenario. This scenario is characterised by supporting consumers’ and society’s needs, and will deliver multi-modal mobility for a truly integrated public transport system.
By using digital technology to connect people, places and goods across all transport modes, MaaS offerings will provide customers with readily available, dynamically updated and user-relevant information. This way they can tailor journeys based on factors such as directness of route, speed, cost and environmental friendliness, and address their accessibility needs.
This is already being realised by companies such as Helsinki-based start-up MaaS Global. Its Whim app (available on monthly subscription or pay-as-you-go) will help individuals identify the best way of getting from A to B using public and private transport. Whim will be trialled in the UK with Transport for West Midlands in 2017.
Datson has also identified four main components required to realise MaaS growth: Big Data needed to facilitate peoples’ journeys; apps that enable users to utilise that data for their travelling needs; appropriate transport modes and transport infrastructure (anything from vehicles to parking and road charging schemes); and, of course, end-user demand.
Greater engagement by business, regulators, policy makers and transport operators ‒ who also count as ‘customers’ in the MaaS paradigm ‒ is also key. There is a potential upside for all, and the sharing of customer insight can help transport providers and policy makers make more effective policy decisions. Meanwhile, for technology companies, data providers and transport operators, there’s the potential to access new markets. The UK MaaS market alone is estimated at running into billions of pounds per year, while the global market is expected to be worth more than £1tn by 2030.
“Policy makers have to be on the front foot with MaaS business model innovation,” says Datson. He also recommends that transport operators stop thinking of themselves as the head and tail of the travel ecosystem. Instead they should focus on their comparative strength in the market. One medium-term opportunity is for highway authorities to use MaaS to sell highway capacity. He cites the airport model as inspiration. “An airport can be seen as a ‘mini’ highway authority; it has a ‘road’ ‒ a runway ‒ and they use pricing and landing fees to optimise that asset, so they run at 98 per cent efficiency. Currently I’m not aware of highway authorities or councils exploring how they could use a similar model once MaaS becomes mainstream.”
Ultimately, though, the future belongs to MaaS providers who understand why people want to make a journey. “Many taxi apps know where I am and where I want to go,” Datson says. “But if they knew why I wanted to go there, they could offer me far more value. It’s about enabling lifestyles. It depends on how far MaaS providers are able to use Big Data and analytics to understand what we want before we request it. It won’t be long before our MaaS provider becomes far more than just a supplier of transport.”