Artical By: Suwan Juntiwasarakij, Ph.D. (Senior Editor)
The Last Transport Model that Man Has Ever Made
Also known as Transportation-as-a-Service (TaaS), Mobility-as-a-Service (MaaS) is model of transportation which is shift from personally owned modes of transportation and toward mobility solutions that are consumed as a service. This service paradigm shift is made possible by combining transportation services from public and private transportation providers through a unified gateway that creates and manages the trip, which users can pay for with a single account. Innovative mobility services such as ride-sharing, e-hailing, car-sharing are emerged as on-demand or pop-up transportation services.
Mobility-as-a-Service (MaaS)
The “X as a Service” model can transform business services. The model enables more intelligent, innovative, and robust business operations. More importantly, it disrupts existing business processes and supports entirely new business models. The phenomenon where a service replaces a product is nothing new. For example, GE started selling “Power by the Hour,” where it leased jet engines to airlines rather than selling them. For another example, XEROX started selling print services instead of printers.
The ambitious goal of MaaS lies in seamless efficient flow of information, goods, and people regardless of distances. It will result in globally scalable door-to-door mobility services without owning a car but with a greater
collection of choices for users to choose for. And this is also the world’s first open ecosystem for information and services in intelligent transportation.
The Sharing Economy Effect
The basic premise of the sharing economy is simple: everything—every product and every service—is sharable, for a price. The sharing economy addresses and meets the needs of both buyers and sellers, those needs can be seen as the three core principles of the sharing model: value, coverage, and trust. Car sharing is taking hold in large urban areas in both the developed and the developing world. Although the largest market is the Asia-Pacific region (including Australia, China, Hong Kong, Japan, Malaysia, New Zealand, Singapore, South Korea, and Taiwan), with 2.3 million users and 33,000 vehicles, Europe (including Turkey and Russia) boasts the largest service per capita, with 2.1 million users and 31,000 vehicles. North America (including Canada and the United States) brings up the rear with 1.5 million users sharing 22,000 vehicles. Together the three regions account for 2.5 billion booked minutes per year and EU 650 million in revenues.
Car-Sharing vs. Car-Owning
While car-sharing enjoys the largest cost advantages, car-owning shoulders a many fixed such as depreciation, insurance, maintenance, etc., and thus the total cost of ownership. In Europe, city-car drivers with less than 7,500 kilometers driving a year would pay less to share than to own, as would drivers of compact cars with less than 12,500 kilometers driving a year to gain an advantage from sharing, and drivers of large car would have to drive less than 24,500 kilometers a year. Overall, 17% of city-car drivers, 46% of compact drivers, and the majority of midsize and large –car drivers would incur a lower total cost of ownership with car sharing, based on their annual mileage.
Take-Home Message
This transport paradigm shift also offers an integration of multiple modes of transportation into seamless end-to-end journey regardless of trip connections or transits with booking and payment managed collectively for all legs. Travelers can choose their preferred trip based on cost, time, and convenience, and any necessary booking would be performed as a unit. Presumably, this service allows roaming trip ticket to work in different cities without renewal trip contracts made at the beginning. This is the modern urban mobility trend.
By 2021, 35 million users will book 1.5 billion minutes of driving time each month and generate annual revenues of EU 4.7 billion. Europe will be the biggest revenue-generating region, followed by Asia-Pacific and North America. However, car sharing will reduce worldwide vehicle sales by approximately 550,000 units by 2021 and cause net revenue loss to OEMs of EU 7.4 billion. Apparently, sharing economy is disrupting markets around the globe, hence mobility service. Sharing will continue to expand, its effect of new-car sales will however be limited since most drivers will not surrender car ownership entirely. This is according to the Boston Consulting Group (BCG).