The Rise of Mobility as a Service - implications to the Retail and Corporate World
We are starting to see a clear shift in the urban mobility landscape from private car ownership and usage to shared mobility use. A large part of that shift is underpinned by a few main trends that will impact our business mobility in the upcoming years.
Population of cities the world over is growing exponentially – today around 54% of the world’s population live in urban areas, by 2050 this number is expected to grow to over 70%. In most cities it is clear that existing transport systems are already inadequate. As the population within cities grow, the pressure on the existing transport infrastructure is expected to increase. This is expected to intensify existing concerns congestion and air quality. Hence, there is a need for more effective and efficient systems to move people around cities.
A number of governments, the world over have started investing heavily in the expansion of mass transit as well as encouraging the growth of shared mobility solutions such as bike sharing, carsharing, even e-hailing. The new mobility solutions are expected to serve as substitutes to private car usage, as well as serve as last mile mobility solutions encouraging further use of public transit. Automotive stakeholders across the entire value chain, have realised the potential market opportunity that exists, which accounts for the dynamism in the space. Frost & Sullivan expects that the total mobility solutions market opportunity could grow from 1 trillion dollars in 2017 to over 2 trillion by 2025. One of the key market segments/solutions driving this growth is expected to be the ‘mobility as a service’ market.
The sense of Seamless
Seamless travel across different modes of transportation is the future of urban mobility. ‘Mobility as a service’ is described as a journey planning, booking and payment system that allows for seamless point to point, multi modal journey for the customer. This will take customer travel experience and flexibility in transport services to a next level. In this infographic, we show the different MaaS operator s that are piloting their services across different cities around the world such as MaaS Global, Moovel, Conduent.
Some examples of preliminary success of the business model include:
- Moovel offers customers the option to book and pay for multiple modes of transport through the same app. It also offers a white label platform to cities and transit authorities that can be used to integrate multiple modes of transport and optimise traffic flows. Over the past 12 months Moovel has added over two million users to its platform.
- Whim, the MaaS app launched by MaaS Global, has successfully expanded from Helsinki to Birmingham and Antwerp. They offer a unique solution where in addition to a pay as you go solution, sell mobility as a subscription. Their customer base has grown to over 45,000 users in Helsinki alone.
An interesting trend is that of ehailing operators such as Uber/Lyft/Didi forming partnerships with bikesharing operators/public transit operators, moving towards becoming MaaS operators. Uber for instance has been clear that its long term strategic vision is to run the entire transport network within cities. They acquired the bikeshare firm Jump and are partnering with the peer-to-peer car-rental company Getaround and the mobile transit ticketing startup Masabi.
Lyft is running a pilot in Chicago where they offer access to $550 worth of travel across multiple modes of transport - $300 in Lyft shared ride credit, $45 for a Divvy bike-share pass, $100 in Zipcar credit, and $105 for “L” train and bus service.
While these solutions are primarily focused on retail customers, they are starting to tap into the corporate market. One of the most mature MaaS solutions is a service launched by the Dutch operator – NS. The NS business card targets corporate customers and commuters and offers seamless to multi modal transport with the convenience of integrated online billing system that allows fleet managers and consumers to distinguish between personal and business travel.
Thus we see that the new mobility businesses models that have emerged in the retail space are set to innovate and disrupt the corporate world. There is a push on the regulatory front as well, for instance in Belgium and potentially France, to encourage this change. Companies are beginning to shift from looking at the total cost of ownership, effectively evolving from considering the cost of an operating lease to evaluating the total cost of mobility, which takes into account all modes of travel including car rentals and taxis for instance. The market is evolving to shift from car allowances to mobility allowances. The trend is expected to take off in the mid to long term, driven by pressure from local governance, economic imperatives as well sustainability goals of corporations.
Author: Shwetha Surender, Industry Principal Mobility – Frost & Sullivan