Why Mobility as a Service is the future of transportation

Modern technology is revolutionising how we move across cities. The proliferation of rideshare apps, vehicle sharing platforms, mapping apps, along with the imminent arrival of autonomous vehicles means there’s no shortage of options to get from point A to point B. But what if one service won’t take you all the way to your destination? Unless you’re willing to spend lots of time doing research, you’re unlikely to get the best results. That’s the problem that Mobility as a Service aims to solve.

What is Mobility as a Service?

Mobility as a service – MaaS for short – is the concept of shifting transportation solutions to an on-demand service. Instead of individuals owning and operating their own vehicles, MaaS providers offer transport options when and where the user requires them. In much the same way that Netflix and Spotify provide convenient access to TV, movies, and music, Maas provides convenient access to a wide range of transport options to get around our current and future cities. Rideshare apps (Uber) and peer-to-peer rental services (GoGet, FlexiCar) and micro-mobility services (Lime Scooters, Jump Bike) are all current examples of MaaS solutions.

What issue is it trying to solve?

According to the UN, 68% of the world’s population is projected to live in urban areas by 2050. This poses a major challenge to those in charge of planning our transport infrastructure; sooner or later we’re going to see diminishing returns on road transport infrastructure. The unfortunate truth is that regardless of how many new roads we build, there is a hard limit to the number of vehicles that can be on the roads at any one time.

Furthermore, a recent report by Transportation for America concluded that congestion in urbanised areas has increased by 144%, despite more than $500 billion dollars being spent on the strategy to widen and build new highways across the United States. Unfortunately, widening and expanding highways simply entices more people to drive, with demand quickly outpacing the capacity of the highway.

Cities need to start taking a more holistic approach to transport infrastructure.

By moving to a MaaS model for transportation, we reduce the burden on individuals to own their own vehicles. For example, an individual might own a car and commute to work. But given the choice, they may instead commute to work via public transport. Especially if they are close enough to the relevant infrastructure. This dramatically reduces the need for that individual to own a car that spends most of its time sitting idle in the garage. Instead of owning a car, they could sign up to a peer-to-peer rental service and hire a vehicle if and when they need it. This would help reduce the number of vehicles on the roads.

Advantages of MaaS

There are numerous benefits to be gained by shifting our transport infrastructure towards a Mobility as a Service model.

Higher vehicle utilisation
MaaS services provide the opportunity to reduce the overall number of vehicles across the community. If you think about vehicles as an asset, unless you spend the majority of your time on the road your asset is going to be underutilised. Instead of sitting idle in a garage or in the work carpark, other people could use your car. Higher utilisation means that overall, fewer cars need to be in circulation in a city. This also reduces the amount of valuable and costly space allocated to parking.

Opportunity to recover asset costs
Not everyone will be able to move completely to a MaaS solution. Some individuals will still need to own their own vehicle. However, this provides an opportunity for people to use MaaS services to recover some of the costs associated with keeping a vehicle on the road. Just as someone might rent out their holiday home when they’re not there, people can use peer-to-peer MaaS rental services to rent out their vehicles when not in use.

Focus on public transport infrastructure
Reducing the need for governments to continually build bigger road networks provides the opportunity to invest in public transport infrastructure. Higher investment has the potential to provide more frequent and timely services that can benefit a larger population and make for a more reliable end-user experience.

Decrease cost per user
A car loan, registration, insurance, servicing and fuel – there are major costs associated with owning a vehicle. While these expenses are generally spread out over the life of the vehicle, they do quickly add up. When you factor all the relevant costs, you might be surprised to know that the cost of ownership and operation can be higher than $350 per week. Against that, the costs associated with the occasional rideshare trip or car rental don’t seem quite so prohibitive.

How organisations can benefit from MaaS

Mobility as a Service isn’t just for individuals; there are untapped opportunities for organisations and their fleets. MaaS can provide organisations with opportunities to make better utilisation of their fleets.

Reduced risk for fleets
It’s no secret that fleet managers are sometimes tasked with the impossible; they have to manage and maintain vehicles on increasingly tight budgets. However, shifting to a more flexible MaaS transport model, provides opportunities for fleet managers to reduce the risks associated with acquiring and maintaining a fleet of vehicles. This can be achieved by reducing the number of vehicles required in an organisation’s fleet. Fewer vehicles means the organisation has a lower risk from an insurance perspective, and a lower risk of traffic incidents and infringements.

Increase the utilisation of fleet assets
There is also the opportunity for organisations to find new ways to recover the costs associated with their fleet assets. Fleet managers could potentially open up fleets for public use on weekends and public holidays. This may provide an opportunity for organisations to recover the long-term costs associated with running and maintaining a fleet.

Transport alternatives
MaaS also provides organisations with the opportunity to offer their staff alternative means of transportation. Staff could log into an online platform to plan their journey, which could present several options based upon desired criteria. This might involve walking, scooter/electric bike hire, public transport, and/or car sharing. This has the potential for organisations to save on the overall transport costs per individual staff member.

At Smartrak, we’re excited about the opportunities that Mobility as a Service can offer organisations and fleet managers. We welcome your participation, as we journey towards more flexible, sustainable, city-friendly, transportation solutions.

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