Author: Sascha Spillner, account manager, Avnet Abacus
Mobility-as-a-service isn’t a new buzz phrase, but with an increasing focus on reducing emissions as well as standout successes in several niches, and a rising market for micro-mobility solutions, MaaS is beginning to have an impact on transport as a whole, and automotive in particular. Mobility-as-a-service (MaaS) is the integration of a wide variety of transport methods, both public and private, to create an overall mobility system. The key to more developed MaaS systems is removing the requirement for self-ownership of vehicles, at a basic level ensuring that an area’s transport needs can be met with a lower number of vehicles by using wasted capacity efficiently.
Evolving business models
That might sound like an attractive proposition for city infrastructure providers, transport operators, manufacturers and consumers alike, a fact which has driven significant interest in the concepts behind MaaS. Indeed, a Goldman Sachs report in 2019 predicted that $7tn in existing markets would be impacted over the next 10 years creating opportunities in a “new mobility” market that the firm estimated would generate more than $90bn in gross revenues in 2018, growing to over $375bn in 10 years (+15% CAGR).
The rapidly maturing business models and associated service market to support MaaS is already becoming visible. Just a few years ago, traditional mobility models ruled the roost, vehicle ownership, leased taxi, trains and buses made up the bulk of private and public transport options. Today the success of business models such as ride hailing and ride sharing is an everyday fact for city dwellers across the globe. While the early movers such as Uber and Lyft are recognised household names, there are a host of competitors springing up, including Bolt, Ola and Kabee in the UK alone.
Electrification - the future
Part of the driving force behind this sea-change in consumer behaviour is certainly regulatory, in the form of increasingly unitive emissions targets across many Western nations, including most of Europe and North America. This regulatory drive has made the case for electrical vehicles sing much louder than other emission-free alternatives (notably Hydrogen), causing an explosion in adoption of electric cars, e-bikes and e-scooters.
While the market for pure-play electric cars has been hindered by several factors, including range concerns, and a slow start for rapid charging stations, the market for two-wheeled alternatives has rocketed of late. This acceleration is particularly marked in the micro-mobility segment, where ‘last mile’ options, such as smaller, more nimble city transport and straightforward subscription/docking systems have been well-road-tested by innumerable cycle schemes in a similar vein.
Companies such as Bird, Zipp Mobility, Tier and Dott offer micro-mobility solutions in a huge number of cities across the globe. With a few exceptions and some regional variation, the use of an app to locate the most convenient e-bike or e-scooter, followed by a per-mile or per-hour billing mechanism until the vehicle is either docked or locked again by the app is the current established model, and one that continues to gain acceptance among city councils and licencing bodies.
One recent trial that launched on 7 June 2021 sees e-scooters become available to rent in a small number of London boroughs via Dott, Lime and Tier. Otherwise illegal to operate on UK roads (and pedestrian areas), e-scooters – and the wider micro-mobility movement – offer space-efficient and zero-emission travel that’s ideal for crowded city centres.
According to Inrix 2020, the Global Traffic Scoreboard, Londoners lost 69hrs to congestion each in 2020, one of the greatest drivers of city pollution. Whether this particular initiative was part of the UK Government’s November 2020 announcement of a £1 million of funding to extend e-bike hire schemes is not clear, but that pledge alone also indicates the direction of travel.
Enabling MaaS - telematics
Alongside the diverse technologies that are enabling the MaaS revolution - a broad sweep that includes smartphones, improved connectivity such as 5G, improved battery technologies and even the rapidly-maturing promise of V2X communication – an oft-unsung hero is vehicle telematics. The simple fact is that before improved telematics hit the market, many of the more sophisticated applications within MaaS were not practical.
Particularly in the context of micro-mobility and car subscriptions, advanced telematics combined with rising smartphone penetration have combined to make new business models come to life. Indeed, one recent market report valued the global commercial vehicle telematics market at $4.86 billion in 2019 and predicted that the market would reach $5.93 billion by 2025. The market is anticipated to grow at a CAGR of 7.92% during that forecast period 2020 to 2025, with increased MaaS demand in the driving seat, according to Research and Markets.
The fact is that MaaS is already here, visible in so many ways in cities across the globe. The coming half-decade will see increased emissions awareness and controls, which will drive EV adoption. In turn, the increasing practicality of vehicle subscription models and the parallel pressure on residential space will inevitably drive consumer interest, while the improved vehicle telematics industry seems set to transform what was a reactive into a proactive business model within just a few years. MaaS will be here – and fully mature – before we know it.