One digital platform to plan/book/pay for all sorts of trips
Is Mobility-as-a-Service ever going to happen?! Integrating a bunch of devices and brands would delight customers.
Here’s Mobility-as-a-Service (MaaS) in a nutshell: a digital platform where a traveler can plan, reserve, and pay for trips on a single platform. Multiple brands, vehicle types, and subscription options available all in one simple place.
Bikes, skateboards, scooters, cars, moving vans, ferries, planes, trains…integrating the mobility options would be a delight for customers. Frankly, I want this technology at my fingertips yesterday.
So if MaaS is such a great idea, how come it’s not a thriving business model yet? The credentialed professionals are white-papering us to death with their explanations, so very little seems clear.
Occam’s razor is a problem-solving philosophy dating back 700 years: The simplest explanation is usually the correct one. Here’s the simple and correct explanation about the lack of integrated mobility, or MaaS: different experts are solving different problems. And that’s okay. Our industry-wide messaging problem is partly to blame for the fair question, “If MaaS works, where is it?”
Many software startups around the world are building, testing, and deploying MaaS platforms at various scales. Some are structured as Business-to-Consumer (B2C), some Business-to-Business (B2B), and some Business-to-Government (B2G). Each has merits, but they resolve different pain points, and they aren’t all intended for the same customers. B2C, B2B, and B2G aren’t equals, so blogging or speaking about them interchangeably adds to the cultural confusion of MaaS.
It’s not uncommon for software developers and consultants to exaggerate their capabilities in marketing material and websites. I get it…there’s a fear of being known for a niche rather than one-stop-shop. So to friends and strangers working in this space, I say
Hear me now and believe me later: building a thriving and sustainable MaaS business begins with a clear and simple description of the problem you’re solving.
Travelers need what you’re developing, even if it’s not an entire ecosystem. Focus on what you do well.
The painkiller for travel headaches
You might compare Mobility-as-a-Service to Movies-as-a-Service. Or as normal people might say, Netflix. We all enjoy a platform where you can search for available movies, select one or more genres you want to watch, and pay for it -- all in the same platform without having to jump to another app or website. You can do the same on Amazon, with or without a subscription.
Imagine if you had to deal with each and every movie studio separately. Dealing with their terms and conditions separately. Imagine some required PayPal while others required Stripe. Some might require a minimum rental amount. You just want to watch a movie, not deal with the hassles of various brand platforms.
But that’s how it is when you and I want to access transport services. We have to deal with each production house separately. All the fleets are separate. Airplanes, trains, the local bus, on-demand shuttles, ride-hailing, electric scooters, bikes, loaner cars and rental cars.
What a pain! You have to download new apps for each brand, which means you have to even know they exist in order to download them. You’ve got to uninstall apps on your phone to make room for the new mobility apps. Then go through a registration and onboarding process. Prove you’re who you say you are. Connect a bank or credit card, and then prove the bank or credit card belongs to you.
A MaaS platform combines all the steps in one place to give customers a seamless experience. Brand loyalty will exist to the extent that the customer experience is convenient and intuitive. Otherwise, what’s the point of integrated mobility?
Uber and Lyft have dabbled with the MaaS idea. They each bought bike share companies and integrated the bikes into their apps. So if you open the Lyft app in Washington, DC, you’ll see options for bike share stations nearby, dockless scooters, and ride-hailing cars.
But that’s just the beginning. The powers behind those household names want your attention on their own brand because they’re making a play for the “too big to fail” protection of government agencies. The brilliance of Uber and Lyft was solving a pain point for personal car ride-hailing, not integrated mobility. Once they had that down, they started expanding their platforms.
Strava is a social network for tracking physical exercise. They just recently gave users the ability to see 70,000 bike share stations from 600 bicycle and scooter providers. This is directly connected to their mission to promote active living for people around the world. This can be part of a MaaS ecosystem.
The public vs. private ownership debate
Who should own a Mobility-as-a-Service platform? That’s a reasonable and frequent question, especially because subsidized services like the local bus are often part of the integrated mobility mix. Why should Uber profit if a customer rides the local bus, right?
MaaS will thrive as a business, not as a division of a government agency. A city or town or bus operator may purchase or lease the software solution, but that’s no different than the public sector purchasing a certain brand of shirt for its employees or leasing a certain brand of cloud computing software.
Customers will not be well served if there’s a government monopoly on mobility. Government can either have a monopoly, or it can serve the public interest. The two options are mutually exclusive.
Transit operators and government agency staff have two different roles to help grow mobility freedom. High-occupancy transit should be a primary feature in urbanized areas. Think of it as the trunk of the mobility tree, with other modes as the branches. Out in rural areas, on-demand mobility will be the primary feature. One MaaS brand may just connect two modes: a commuter shuttle and a bike share system. Another brand may offer access to fixed-route bus, on-demand ride hailing, skateboards, and jet skis.
Perhaps one day there will be a handful of dominant MaaS brands, and that’s fine as long as small brands are permitted to exist. In other words, don’t regulate away competition with a “too big too fail” bailout mentality. Promote competition at every policy and permitting stage.
Here’s the best role for local government: stop blocking progress. Take away the barriers to integrated mobility and let the private sector innovate.
A great way for public administrations to advance customer access and choice is to get to work repealing zoning and parking regulations. At the same time, stop building infrastructure that forces more single-occupant vehicle trips. Nobody’s going to use an integrated mobility platform for a bike or bus when local regulations make solo driving the most convenient choice, especially for short trips.
The risk and reward of Big Data
Big Data issues were magnified during COVID-19 because of all the interest in tracking sick people. Our industry needs to be aware and concerned about it. Data is part of the MaaS business ownership question.
Does the MaaS platform own and protect your personal information, or do you hand it over to the authorities to own and manage?
Risk of Public Sector Ownership
In China, residents were forced to install coronavirus apps to track their movements and give a health score of red, yellow, or green.The government blocked people from using public transit based on the health score. Chinese residents and visitors were suddenly unable to decide for themselves if they should work, go to school, or buy groceries. Even worse, we know when authorities have that type of control, they track political dissidents, social outcasts, and religious minorities.
Think about America’s civil unrest over the last two years. Social clashes are leading people to entrench themselves with tribes, and political leaders are regularly making headlines for abusing power. In a free society, let individuals decide how much of their personal lives should be monitored by authorities. If governments own the treasure trove of personal data, you will lose mobility freedom.
Reward of Private Sector Ownership
A business needs to know as much as possible about its customers in order to deliver the products and services that keep selling.
If I know where people tend to congregate, which neighborhoods have the most commuters, and which entertainment districts have the most activity, then I’ll have a good idea which types of mobility operators I need to pursue as partners for my digital platform.
The personal data issue is full of trade-offs. If you found this article through Twitter or LinkedIn, you’ve already chosen to give up quite a bit of tracking data to private enterprises. That’s because you believe the use of those social platforms has value and you’re willing to give up some level of privacy. If your kids are using TikTok, then any device with the app allows the app to monitor what they type and whatever the microphone picks up.
My point is not to scare you into living in a bunker. I want to remind you that your data is valuable, just like seamless transportation would be valuable to you.
Transportation can be profitable as a service or utility
Profit is often mislabeled as the villain of the transportation industry. Critics of private enterprise argue profit is selfish and doesn’t serve the public interest. The truth is that a profit motive drives innovation.
Transportation-related policies should be loose enough to let the market create and adapt. Embrace the fact that private industry has a profit motive. If competition is encouraged, then the customer wins. Think of eBay, where each seller is motivated to choose a price based on the value of the product while considering customer reviews. If a seller misleads customers or puts them in danger, they’ll lose business.
Governments don’t have a profit motive, which is partly why they didn’t invent the bus, roller skates, the bicycle, or even the wheel. Understanding the societal benefits of a profit motive will lead to a better use of government staff resources.
“MaaS as utility” is an alternative to multiple, standalone platforms each pursuing market share. In the United States, we have regional utility providers for natural gas and electricity. Mobility could also be treated as a utility.
One role of the government in this case would be to prevent a utility monopoly (as opposed to creating their own). Encourage private enterprise to deploy profitable businesses without favoring one brand over another. Local staff doesn’t care if you buy Nike or Reebok, they just care that you spent money in their jurisdiction.
When agencies roll back regulations that make single-occupant vehicle trips so attractive, customers will accelerate the shift to MaaS.
Attracting and acquiring customers
Any successful business owner evaluates customer acquisition. They start out with nothing and need to have a plan to convince people to buy the product or service.
One of the common concerns about MaaS is that nobody in North America will give up their car. I’ve got news for you. People in Copenhagen said the same thing in the 1960s about downtown traffic. 60 percent of city residents commuted by bike to work or school in 2020. But back in the 1960s, the streets looked like Anywhere, USA: personal cars everywhere.
Copenhagen changed their infrastructure to be inconvenient for solo car journeys, and people opted out of the car. Bicycling became the obvious and convenient choice. And a bicycling-friendly city opens up options for high-occupancy transit.
Government agencies in North America have a tremendous opportunity to accelerate the deployment of MaaS as a way to meet their goals for sustainability goals, congestion management, equity, and transit ridership.
MaaS businesses will have customers in three major sectors: commuter travel, corporate travel, and leisure travel.
Commuter travel makes up half the trips in the U.S. The percentage may go down as people got accustomed to working remotely, but commuting is still the bulk of personal travel.
Corporate travel will be a smaller but steady customer base. MaaS can replace the old corporate fleet of cars. It reduces corporate overhead and increases options for transporting staff for short or long journeys. A corporate MaaS option gives employers the assurance that their employees are safe and healthy in shared vehicles.
Leisure travel will grow again now that most of the world has moved beyond travel bans. The tourism and entertainment industry has been hit hard by the coronavirus, but they’re already seeing bookings start to pick up. .
So what’s the future of mobility?
I own hundreds of CDs and DVDs. Ever since I started earning money pushing a lawnmower, I was spending it on music and movies that I was convinced needed to be at my fingertips. Then along came Music-as-a-Service and Movies-as-a-Service. Customers like me were asked to pay a monthly subscription for access to a huge catalog to consume anytime, rather than purchasing each and every release.
I converted. My options were expanded to a scale I still can't comprehend. Any genre, any time. I connect to shared libraries without dealing with the cost and inconvenience of personal storage space.
Give customers good value for their subscription, and they’ll happily reduce personal car ownership. A MaaS platform can convert a 3-car household to a 2-car household for starters. A family can have access to large vans to help with kids moving out, bicycles for short trips during the day, electric scooters for hot days, and autonomous shuttles to connect to the airport.
MaaS can and should be about choice for customers. Many people will opt for a scooter, a bicycle, or a moped. And those same customers will sometimes want to use high-occupancy transit.
With or without a pandemic, we need businesses to develop and deploy digital platforms that let us plan, book, and pay for journeys.
Customers are standing by for Mobility-as-a-Service.