By Dimeon Van Rooyen
Freedom of mobility is a core need that most humans spend a large part of their time and money to achieve. For just over a century, the solution was owning a car. But a massive paradigm shift is on the horizon, with the introduction of mobility as a service (MaaS), which is poised to not only change the way we view mobility and vehicle ownership, but also how we construct our society.
The beauty of Maas is that it provides that rarest of solutions where personal interests and sustainability are perfectly aligned. Given its impact and the size of the market, many providers will look to carve out a niche. But they will have to compete with the visionary early incumbents, such as Whim, with serial entrepreneur, Sampo Hietanen at the helm.
What is MaaS?
It is almost impossible to overstate the impact that MaaS is about to have on our lives, to the point where entire cities will be constructed differently to accommodate the coming mobility disruption.
“To understand MaaS and its impact, one must first understand what mobility means to us,” says Hietanen. “Mobility means the freedom to move around from place to place whenever we wish. At the centre of the mobility is car ownership.
“Therefore, if there is to be a tech disruption in mobility, it would be around disruption of car ownership, without disrupting our freedom of mobility. As a transport engineer, I know that it is actually pretty silly to own a car where I live. And yet, I and many other people own cars that we pay quite a lot for. So, the question has to be, what does someone have to promise me that will make me give up my car?”
And this is the question that MaaS answers. For a flat monthly rate that is considerably less than what car ownership would cost, people get access to a host of transport modes, including trains, buses, taxis, and scooters.
These modes of transport all have their advantages and drawbacks when you compare them to car ownership. On their own, they cannot compete with the freedom of mobility that car ownership provides. But when you combine them on a single platform, they have the power to disrupt the car ownership paradigm.
The AHA moment:
Why the market is right for disruption
Car ownership is so entrenched in the minds of most people that we, as a society, have not yet begun to contemplate what a world could look like where most families and businesses function perfectly well without owning any vehicles.
“Disruption in the mobility sector is inevitable, and it will be as big as the disruption in the telecoms industry that started in the 80s,” says Hietanen. “On average people spend 10 times more on cars than on their mobile phones per month, so the size of the industry is huge. When I started out, the mobile phone guys were the hot shots, but the realisation that I am in a business that is much bigger and sexier than theirs was quite a revelation.”
“Disruption is necessary from a macroeconomic point of view because it is staggering how unproductive car ownership actually is. After covering the cost of living, households spend 76% of their income on their cars, however, they only use their vehicles an average of 4% of the time.”
MaaS therefore solves the inherent problem with car ownership – the huge cost associated with a product that is not in productive use. A recent OECD simulation across various cities found that 3% of all the cars on the roads could complete all the daily trips.
MaaS and the future of sustainability
If the planet is serious about achieving sustainability goals and turning cities into healthier environments, then MaaS has a leading role to play. It can aid sustainability in a variety of ways.
Reducing CO2 emissions
“I sometimes find it appalling when people talk about sustainability, but ignore the impact MaaS will have on the transport sector,” says Hietanen. “At the moment, 25% of CO2 emissions are transport related and by 2030 it will be 40%. It is the only industry that has not nominally improved since the 90s and three quarters of that is due to private car ownership.”
Of course, MaaS does not completely solve the CO2 emission problem, but it does optimise the use of shared transport, and the use of cleaner vehicles, so the impact on the overall air cleanliness of a city can change considerably.
One major impact that private car ownership has on our world that often goes unmentioned is parking space. Retail centres, businesses, and sport stadiums are all designed to accommodate numbers of vehicles. In many countries, there are laws mandating a fixed number of parking spaces per commercial building.
“I have spoken to someone who rents commercial buildings, and they estimate that they take a loss of between €20,000 and €40,000 per parking space,” says Hietanen.
And even when cars are not unproductively taking up parking space, they are looking for parking. Many studies have found that people looking for parking space is a major contributor to congestion. Once MaaS gains wide appeal, the need for parking will decrease to the extent where these spaces can now be used for parks or other greening initiatives.
Increasing individual productivity
When MaaS achieves critical mass, cities will take on new personalities, as many negative factors associated with transport, such as noise pollution, congestion, and CO2 pollution will decrease. Travel times to and from work will also decrease, which will aid productivity in a business.
A recent study found that the average American spends around 17 hours a year looking for parking. MaaS allows users to spend their time more productively.
Challenging entrenched thinking
Given the long list of advantages for individuals and the planet, one might think that MaaS uptake would be swift, but Hietanen has faced his fair share of challenges. Mostly, entrenched thinking that places car ownership at the core of our modern psyche stands in the way of quick progress.
“People’s thinking is really understandable, because car ownership means freedom of mobility,” says Hietanen. “So the solution has to be something that they can trust to provide the same freedom at the level that they feel they deserve.”
Marketing MaaS to companies also faces challenges from unexpected sources. Many workers enjoy a company car benefit, along with the resulting tax benefits. Because governments do not yet recognise MaaS as a fringe benefit eligible for a tax cut, many companies are loath to change their current remuneration structures.
Hietanen hopes that this will change in the future, because leasing accounts for 50% of new car sales. He takes heart from the example of mobile phones, where penetration started to skyrocket once companies could define them as fringe benefits.
The user case
Hietanen stresses that, as with any marketing exercise, the solution lies in a clearly defined user case.
“After running bigger and smaller businesses during my career, I recognised that MaaS provides me with that one shot of bringing positive change to the world. The impact on sustainability and car ownership just looked like a no brainer to me, so it was only later, when opposition became clearer, that I really started to focus on the user case.”
So, while most people are in principle committed to a cleaner future, this consideration is not always top of mind when making individual or even business mobility decisions. Hietanen realised that the only way to encourage uptake was to convince people that MaaS is a better alternative to car ownership.
Therefore, the marketing focus is not on global sustainability, but on showing how MaaS can provide a reliable alternative, without any of the drawbacks of not owning a car.
Trips on Whim continue to increase in the cities where it currently operates, but Hietanen still has some challenges to solve before his vision of taking it global and making car ownership a thing of the past, particularly branching out into rural areas.
“I am not too concerned, because that is the natural progression of technology,” says Hietanen. “In the early days of mobile phones, they also said that developments such as 3G and 4G would never see the light of day in Finnish Lapland or the UK countryside. And today it is everywhere.
“MaaS will also be the most successful where populations are dense, and then spread out as people start to demand the same service wherever they are, and as the supply starts to build up. Even when you travel on a gravel road, you see a car coming along every few minutes, so the supply is already there.”
“Besides, the biggest mobility issues exist in the city. Even if we cannot solve the rural issues straight away, this project would still make sense.”