Clearly, the automotive landscape is changing. Everywhere you look, the future of the car is being discussed and predictions made, although one aspect has, until recently, taken a backseat in the discussions of modern travel – Mobility as a Service (MaaS), writes Ian Wardle, director of business development, Maiden Insurance Partnerships.
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 or Ofo’s dockless bikes in Beijing, to ride-hailing services, such as Uber or Lyft.
MaaS would enable consumers to seamlessly access, use and pay for multimodal mobility services, both private or public. This could mean it could mean ordering an Uber to the nearest train station, picking up a hire-bike at the destination station before dropping it off at a docking station, and completing the last leg of the journey on foot, all via one app.
From a customer’s point of view, services are selected on the best value proposition; cost, convenience, personalisation (for instance, journey or travel recommendations based on the user’s data) 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‘ business model, with consumers paying a monthly fee to use a pre-set amount of services per mode.
MaaS is on the periphery of public consciousness, but global interest is growing as the concept captures the attention of both public and private sectors. In fact, digitally-enabled car-sharing and ride-hailing services are predicated to be the biggest disruptors to the dominant car ownership mobility model now. By 2030, it’s expected that revenues from mobility services will reach almost $1.2 (€1.04 trillion) trillion, with little growth in private car sales.
So, what’s prompting this potentially seismic shift towards MaaS, and how can car manufacturers make sure that they’re leading the way, rather than eating their competitors’ dust?
Why the move to MaaS?
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 British roads by 2021, with countries such as the USA, Singapore, Netherlands and China also taking significant steps to get them on their roads.
A government commissioned report identifies the mass introduction of driverless cars as the catalyst 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 car manufacturers stay competitive?
The prospect of a dwindling private-car-owning population may be an uncomfortable prediction, but car makers 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 car manufacturers 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, automakers 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 car manufacturers to monetise the consumers’ user experience and capitalise on new revenues. Expectations will be high – exceptional connectivity and personalisation will be standard – and car manufacturers 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.
Car manufacturers can’t afford to rest on their laurels; there are already a number of companies gearing up for the mass move to MaaS. Toyota has invested over €10 million in Finnish-based MaaS Global, as well as forming a $100 (€86.35 million) million Al-focused venture, General Motors is affiliated with Lfyt and Uber itself is investing in creating autonomous cars so crucial to widespread MaaS distribution.
The author of this blog is Ian Wardle, director of business development, Maiden Insurance Partnerships.