Mobility-as-a-Service has moved from a concept for the future of urban transportation to reality in some of the big cities of the world. There are numerous projections about Mobility-as-a-Service market. For example, Accenture research shows that by 2030, revenues from manufacturing and selling vehicles (around €2 trillion) will be only marginally higher than they are today, and that profits from car sales will decrease (from around €126 billion to €122 billion). By contrast, revenues from mobility services are predicted to reach almost €1.2 trillion—with profits reaching €220 billion. Whatever its form might be, there is no doubt in minds or strategies of the biggest automotive and transportation companies that demand-responsive and integrated transportation services are what users demand today. It is essential to survival and prosperity of all mobility providers, whether they might be car sharing or car rental businesses to adopt this trend and tailor their service to be used as MaaS.
MaaS, due to the fact that it covers so many modern transportation methods and integrates them into one service, is under no threat from self-driving cars, micro-mobility or any other trends that affect the transportation industry, quite the opposite, it seems to integrate them under its umbrella and as a result, increases its benefit to users. This is due to the fact that modern city dwellers want seamless service available to them through their main interface, smartphone. While MaaS is here to stay, it doesn’t guarantee that specific business models, transportation packages or services will survive individually or within the packages offered under MaaS. As MaaS is based around the concept of efficiency, cost and time effectiveness, services that do not address the transportation needs of customers in specific time and location, are doomed to die in competition to more effective methods offered under the same service. Car sharing or other shared mobility operators that remain as individual services and do not integrate with other services also risk losing customers in the near future, as more integrated services overtake the cities.
Mobility Services explored by OEMs
Modern MaaS services include several crucial parts – car sharing and car rental services for mid- and long-range trips, ride-hailing, public transportation, and last mile transportation services, like e-scooters and shared bikes. It is crucial for operators of these services to understand not only how the users utilize their services but how they can combine it with other transportation services available.
One of the keys to success in MaaS-driven market is forming partnerships. No individual OEM, car-sharing operator or public transportation service is able to provide a full spectrum of services across a large geographical area. OEMs, like Daimler and BMW, have already started consolidating their services to provide several layers of such services. The joint ventures formed by these auto manufacturers already cover car sharing, ride-hailing, parking services, and several other mobility services. Uber is diversifying its services to include bike-sharing, that further increases the value of the ride-hailing services it provides. Several models are competing for last-mile transportation, most importantly e-scooters and bikes. For smaller players it will be hard to compete with such big companies, however, it also offers great opportunities. Firstly, MaaS offers great rewards for first movers, whether they are carsharing operators or e-scooter companies. Even big OEMs do not have resources to deploy in all areas of interest, as lucrative markets of the US and China have very strong competition but are also a requirement for big automotive companies. Fast growth areas in South America, Africa, the Middle East, and South East Asia offer a great opportunity for first movers to consolidate their market share with future partnerships in mind. This seems to be happening already in several geographic areas, from Didi’s acquisition of 99 taxis in Brazil to talks of Uber’s interest in Middle-East-based Careem.
German MaaS will reach 20% of total individual car transport in 2027. Source: Accenture
Along with optimizing their car sharing and rental operations in these fast-growth markets, operators should be actively working with city administrations and public transportation companies to form partnerships that would further increase the benefits of their services, allow them to cover larger geographic areas and provide a full range of services that might be of interesting to urban population. City administrators are already actively seeking solutions that would take pressure from public transportation, especially in fast-growing cities. The world continues to urbanize with 55% of the global population living in urban areas today. By 2050, projections suggest that will increase to 68%. This increasing urbanization will add to the existing problems of traffic congestion. Depending on the resources of car sharing or car rental business it might be more effective to concentrate on specific areas of the city and expand their coverage through partnerships with other operators.
When talking about partnerships, it is important to underline the significance of full route integration – providing end-to-end route planning, booking, and payment across all modes of transportation on the destination path of a traveler. Just a simple aggregation of other available services in your app is not a great substitute for such integration – e.g. if a user utilized public transport to a specific point with a plan to take a shared vehicle from that point, they need to be sure that the vehicle is available and booked for the time of their arrival and they don’t need to download a new application, open new account and wait for verification on a new service. This, of course, is easier said than done, as operators of different modes of transportation often view each other as competitors and sharing of data on users is viewed with skepticism. However, failing to provide such integrated services might prove much more harmful to business operators. Such skepticism from private and public transportation operators has forced companies like UbiGo, that had a successful trial launch in Gothenburg to move towards countries with already integrated mobility services like Finland and Sweden. MAAS Global one of the first MaaS platforms was launched in Finland and has seen incredible success. However, as big OEMs move towards more partnerships in the area, all operators are seeing the benefits of such integration and risks associating with arriving on the MAAS market too late.
Key requisites for providing MaaS services, like fast cell phone connection and cashless payment systems are available in most geographic areas. Up-to-date information on travel and transit times, location of transportation is also available to all private operators but might be lacking in some public transportation cases. The essential part is forming as many partnerships as possible and deploying as fast as possible, as all shared mobility operators strive to transform their service into a fully functional MaaS service. Companies that have enough resources can form partnerships that allow mutual exchange and integration of their services with their partners (e.g. bike-sharing and car sharing companies might agree to display each others units to their users and allow for seamless transition and payment from one into another), this can be done using a network infrastructure provider or a front-facing MaaS platform. however, smaller companies shouldn’t shy away from integrating their service fully into MaaS partnerships of other companies, provided they do adequate risk analysis and are appropriately reimbursed for the services they provide. Another key factor here that often is on the mind of business operators is branding encroachment. As car sharing service of a small operator is integrated into larger MaaS service, business risks losing its branding and identity and can become just a backend service operator (for some companies, that own just fleets but don’t have a front-facing operation, this is a great opportunity). However, this issue cannot be solved by rejecting partnerships and integration and should be addressed on the identity branding and marketing side, as well as, during the partnership deal terms.
Providing fully integrated end-to-end service will be key to success on transportation market in coming years, as users see transportation as a service that should respond to their demand and needs, rather than them adjusting their routes to available strict transportation time schedules and capacities. Failure to provide such full service or be a link in the chain of transportation modes taken by a user can be very costly if not deadly for shared mobility operators. As shared mobility market and MaaS move in an accelerated manner, and OEMs are striving to get first mover advantage in most markets, companies are encouraged to form as many partnerships as possible with other private and public transportation operators.