Mobility-as-a-Service: Toward Personalized Transportation
With young professionals of the millennial generation showing lower rates of home ownership compared to their parents, a similar trend is extending to motor vehicles.
More restrictive economic conditions and stagnant wages are far from the only conspicuous causes: thanks to ride-sharing applications and short-term rentals, it is becoming increasingly easier to get by in many urban and suburban areas without owning a car.
What is the automotive sector doing if millennials can’t (or don’t want) to buy automobiles?
While new developments in electric and self-driving vehicles attract the most attention from the media, it is important to underscore the simultaneous evolution toward Mobility-as-a-Service (MaaS)—a term for business models based on personalized transportation solutions rather than car sales. According to a recent Accenture report, MaaS is slated to reach €1.2 trillion in worldwide revenue and €220 billion in profits by 2030, surpassing the profits of selling and manufacturing vehicles as major technology firms establish themselves in the field.
Through MaaS, car leasing as we know it will absorb many of the characteristics of a subscription. Users would pay a monthly fee to drive a “primary car”, with multiple plans that offer not only insurance and maintenance, but appealing features such as the option to change vehicles depending on specific needs (such as moving heavy items or going on a weekend trip), in addition to discounted parking and tolls.
Such personalized plans for drivers would also work in tandem with multi-modal forms of service for riders. For example, routes that might start with an automobile ride from a suburb and are completed with public transportation in a city—including shared bicycles and e-scooters—would be covered in a single payment, as opposed to having to pay different providers at each stage of the journey.
In turn, adopting these systems would also result in a drastic reduction of the time allotted to getting places, with savings estimated at over 500 million hours by 2023, or 90 less hours in an individual user’s annual commutes.
As ridership becomes so vastly interconnected, orchestration between public authorities in metropolitan areas, vehicle manufacturers, and private transportation service providers will be one of the most ambitious policy challenges in coming decades. If regulation for driverless cars is an already complex proposition, it is safe to assume that building public-private transportation ecosystems that are both competitive and tailored to each local market will be anything but simple.
At the same time, such efforts will define both the value and viability of MaaS for millions of users. Major European cities are already banning cars in their downtown areas, with the reduction of traffic congestion and the improvement of air quality quickly becoming decisive issues for their residents.
Thus, transportation authorities must also seize on the implementation of sustainability mandates to facilitate MaaS as an unprecedented form of integration between cars and public transit.
Connectivity and public-private collaboration in mobility services will not only play a large part in curbing traffic, pollution, and inconvenience; greater productivity and quality of life are promising benefits as well. While the balance between personal needs and societal impacts must be at the center of the discussion, the abundance of choices for mobility under a general umbrella of coordinated incentives is now more feasible than ever.