Transport is not known for being the most innovative industry. But a fundamental shake-up of ticketing, business model, and infrastructure funding could be on the way.
It’s along the lines of what Netflix has done to movies and what Spotify has done to music. The model (being trialled in Helsinki, Hannover, Denver and Los Angeles) would allow people to purchase mobility, either by-the-month, or in real-time from a smartphone.
Mobility as a Service (MaaS), or Mobility-on-demand, would provide an array of travel options that are cheap, flexible and personalised. Its proponents are aiming for a better service than owning a car, at a fraction of the price.
To grasp the idea, imagine an extension of the Uber model, where only one app and one payment is required to get from any point ‘a’ to any point ‘b’. But the one ‘mobility app’ would cover all modes of transport, including bicycle hire, buses, trains, planes and ferries.
MaaS Global chief executive Sampo Hietanen says one aim is to replace the wasteful private car ownership model. “We ridiculously overpay for the service that we get, but still people want their cars.”
“We want to give people back their 90mins commute, take away the pain of thinking: ‘How do I get there?’, and making sure you are not a polluter.”
The MaaS concept was developed by ITS Finland, a consortium of information and communications technology experts. Previously, Hietanen served as the executive director of this non-profit organization. He now heads up independent company MaaS Global, indicating a bid for the international market.
While car ownership continues to climb globally, the rate of growth is slowing off. And Millenials especially are less likely to lust after ‘a set of wheels’, especially those living in busy urban centres. Car-sharing and pooling apps (such as France’s BlaBlaCar) are also growing in popularity across Europe, but are yet to significantly change the market, especially in the UK.
But Hietanen wants us all to focus on the average cost of running a family car in Britain: more than £3000 per year.
“Because if you look at the amount of money that people have for transportation, it’s 10 times the amount on telecommunication.
“What would it take for you to dump your car, and with £100 per month get access to all public transport you can ever have, within the UK limits?
”Say we get 10% of the UK (signed up), 6M people, that would mean £600M every month, and we would run a lot of taxis with that. So, worldwide, if you can get even 5% penetration, the numbers are just huge.”
Using an app called ‘Whim’, users would purchase ‘mobility points’, preferably through a monthly transaction. Extra points could be earned by opting for public transport. These points could be spent on ‘value added services’ such as use of a Tesla electric car for the weekend.
Hietenan says the idea gets a different reception from consumers and engineers.
“When I talk to customers, they say ‘yes, this is great. Why isn’t it here already?’ When I talk to civil engineers they sigh and say ‘this is going to be hard’.
“But the pieces exist: the transportation is there, the technology is there. We could do it this year, if we wanted to,” Hietenan says.
There are challenges to overcome, including how to get the necessary data to flow freely across the the various modes of transport, each with their own separate commercial operations. Who would operate the system? Would it be one big player (say, a Google) or many? Then, who controls the data?
How will governments regulate and invest in infrastructure, if they steadily lose control and revenue over ticketing?
“There won’t be no infrastructure investments, I think there will be much more, but it will look different. The future will be more ‘hub’ based, with networks, as opposed to ‘corridors’ model that we use now,” Hietenan says
“What if, as part of the monthly mobility package, I’m also paying for the infrastructure?”
This idea is currently up for debate in the Finnish parliament, with a MaaS trial going on in Helsinki. One proposal is for a company to operate an ‘infrastructure fund’ for the benefit of end users
“It’s a totally new way of thinking. My thinking is it’s inevitable, why wouldn’t the infrastructure become a part of service for the end user, like in any other business?
So if this is indeed what consumers want, why hasn’t it been done already? The idea traces back years but it’s only just taking off. Why not in one of the most connected cities in the world – London?
A 2015 Department for Transport feasibility study investigated a MaaS scheme for London and found there would be substantial benefits in managing capacity. The report found transport operators would benefit by creating a larger market. Travellers would pay less, get around quicker, more efficiently, and have a better service experience, the report said.
TfL’s director of customer experience Shashi Verma says the institutional environment of the public (and private) sectors can be limiting when it comes to such digital innovations, using the Oyster card as an example.
“There are nine train companies that were dragged into Oyster very painfully. People think it’s a technology problem, Oyster outside London, but it’s been couched as a technology problem for far too long,” says Verma.
One area where Verma and Hietanen agree is the threat of roads being flooded by autonomous cars. The MaaS concept grew in true Scandinavian style: with public transport at its heart. Whereas driverless car researchers Google, Uber and Tesla are California-centric, where public transport is often an afterthought. If driverless cars were to arrive in London tomorrow, congestion would be catastrophic.
“Say if Google were to offer you from a-to-b anywhere for £20 per month… if it’s not hooked up to public transport it will create much more traffic in the city. I’ve seen some of the studies on that and it doesn’t look pretty,” Hietenan says.
There are only a few players in the global MaaS market, but vehicle manufacturers and internet companies are investing heavily.
The biggest single owners in MaaS Finland with a 20 per cent interest are Transdev, a French transportation giant offering land, rail and passenger transport services and Karsan Otomotiv Sanayii and Ticaret AS, a leading car-industry family of Turkey.
Sampo Hietanen holds a 10 percent stake in the company and in an act of solidarity has sold his car in Helsinki. He jokingly says his wife is threatening to buy it back.