The continued growth of urban populations has created new transport demands. This global trend, alongside changing consumer habits and technological advancements, has contributed to the proliferation of transport-as-a-service (TaaS). Michael Blanck, head of Business Development, Connected Car, Cisco IoT, explains.

TaaS term refers to on-demand access to various forms of transport through mobile devices. Enabled by the development of mobile solutions, the mass expansion of the Internet of Things and the analysis of big data, this predominantly urban phenomenon has the capability to benefit many.

With major implications for urban mobility, TaaS can reduce the use of consumer-owned cars, decrease congestion, improve air quality, and open up access to cheaper and more efficient transport options. It also presents great opportunities for businesses and governments, with Accenture estimating that mobility service revenues will reach €1.2 trillion by 2030.

What’s driving TaaS?

Thanks to the advancements brought on by digital transformation, the widespread use of smartphones has changed consumers’ demand and expectations. Now, through mobile applications, services are consumed in new ways, often at the touch of a button. The disruption that ride-sharing services brought to the transport market is a result of this changing behaviour, since consumers now expect to access transport on demand.

What’s more, IoT capabilities have enabled new ways to engage with consumers throughout this process,from the moment someone requests a ride, through to the services they can access within the connected car. All of which can inform drivers and passengers of the best route, provide entertainment services and much more. Thanks to these features it’s no surprise that ride-sharing and ride-hailing services operate worldwide, demonstrating the global popularity of TaaS.

Across the transport sector, whether private or public, IoT is driving innovation. But this trend encompasses more than ride-sharing services. TaaS models are being adopted for city and commercial fleets,and ad hoc bike hiring is also on the rise.Train operators have started to incorporate sensors across their networks to improve public transport and stay competitive. These sensors can help ensure timetables are exact and inform operators of the best time to carry out updates.

Clearly the proliferation of these services represents a change in consumer behaviour towards accessing and owning vehicles, and IoT is integral to this transition.

The benefits TaaS offers

Developments in TaaS have improved the extent to which transport is now connected and is providing city dwellers with the flexibility to choose how they want to travel. Ultimately for consumers, TaaS opens up options, offering both cost conscious and luxurious travel choices, and in many cases both end up being more sustainable.

With many major cities setting targets for testing and deploying autonomous vehicles, we’ll see a gradual shift in consumers’attitudes towards car ownership. IoT opens up opportunities for families and friends to share the cost of a vehicle, enabling co-owners to book a car for a specific date and time, while the autonomous vehicle can drive itself to the next booking.

Consumers could also adopt a business model that would enable them to rent their vehicle to other people. This helps to distribute the costs of maintenance and could eventually turn a profit. This idea has already swept across Europe with Drivy, a platform that helps local car owners to rent their vehicles.

Michael Blanck

Beyond the consumer benefits, TaaS fits into the smart city agenda, in that the data collected from the connected devices can be used to improve urban planning and feed back into the transport network. This creates the possibility if increased integration between private and public service providers, and more joint input into future city planning.

What’s more, the various sharing services TaaS offers, be that carpooling or bike sharing, are inline with green initiatives, reducing congestion, improved parking and air pollution.

Impact on the car industry

Unquestionably the proliferation of TaaS has impacted the car industry. It is transforming the automotive industry, as mobility is no longer sold solely as an asset but a continued service, creating new customer relationships and expectations. Again, this new opportunity relies on connectivity through IoT devices and mobile connections, providing data analytics that the industry can use.

Clearly the recent trend of TaaS points to societal changes brought on by new consumer habits and technological advancements. For businesses and public bodies, this presents an opportunity to engage with customers in new ways through service-driven relationships. As businesses recognise the need to continue customer relationships beyond the selling point in order to access the revenue stream TaaS offers, service provisioning will become central to new business models in this new era.

We are living through an era of great change in this space. Continued advances in technology, changing consumer tastes and expectations, and new business models available to the industry will continue to shift this landscape for the foreseeable future.

The author of this blog is Michael Blanck, head of Business Development, Connected Car, Cisco IoT

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