© 2019 Andy Hong All Rights Reserved.

Mobility as a Service (MaaS): What it is and where it is headed

March 22, 2018

 

1. Introduction

 

Recently, there have been a lot of discussions and interests in the concept of Mobility as a Service (MaaS). Coming from an IT background, I'd like to offer my thoughts and reflections on this emerging concept. Below, I will provide a good working definition of MaaS and discuss it as part of the global economic transition. I will also talk about why it became so popular now and briefly discuss where it is headed.

 

 Figure 1. Graphical representation of MaaS (source: http://www.parliament.uk)

 

 

2. Origin of the concept 

 

From what I understand, the concept of MaaS has been actually conceived and developed by computer scientists. (http://www.hp.com/hpinfo/execteam/articles/robison/08eaas.html). "Everything as a service" is a very popular concept in cloud computing industry where there has been an explosion of companies providing services like software as a service, database as a service, platform as a service, etc. 

 

A driving force behind everything as a service is a cloud computing system, coupled with high speed internet and distributed computing system that allows companies to build and deploy IT services without investing on a single hardware infrastructure. Companies can now build their platforms without having to purchase computers, servers, or hire a single IT staff; they can just purchase a virtual server from companies like Amazon Web Services, Microsoft Azure, Google Cloud, or Heroku, and build a very functioning website that can support all their customer needs on demand, including financial transactions, e-commerce, customer relations, and etc. 

 

 

2. What is Mobility as a Service (MaaS)?

 

Despite this immense popularity of the everything as a service concept in IT industry, transport industry has been lagging behind, and is now playing a catch-up. So, it's not entirely surprising that both the concept and the adoption of MaaS in transport industry have been less clear, and little consensus has been made around its definition. To my understanding, Mobility as a Service (MaaS) is an on-demand intelligent transportation distribution model where a single digital platform offers users with a seamless connection to a variety of transportation services, including but not limited to transit, taxi, bikes, and etc. In other words, MaaS is not mode-specific nor infrastructure-specific; it's about providing users with the most logical way of moving from point A to point B, with the most efficient, cost-effective methods. 
 

Uber is a good example of MaaS because they started their service entirely on a digital platform without even thinking about or investing on a physical infrastructure. They didn't even have a phone number to call for their customer service, just four or five years ago. Their core business model has been dependent on their digital platform, but they are now slowly realizing that they cannot ignore the importance of physical/geographical presence as well as legal/regulatory landscape. To this end, Uber's increasing presence and influence on geopolitics and political economy of labor market are what distinguish them from traditional IT companies, but this is what makes them vulnerable to shifting political sentiment and public opinion.

 

 

3. MaaS in the context of global economic transition

 

An important trend that made the MaaS concept suddenly popular and acceptable now is that this perspective of seeing "everything as a service" fits squarely with the emergence of sharing economy where people value experience over possession of material goods or products. This global economic transition from a focus on "products" to "experience" is significantly changing the way firms produce, sell, market, and deliver goods or services to their customers.

 

Figure 2. Four evolutions of economy

(Source: https://medium.com/@uxmesh/glamping-cafe-hopping-and-zombie-runs-in-the-experience-economy-ee7ee379cd0c)

 

 

Furthermore, it is important to recognize that the increasing support for experience and sharing economy was made possible through the technological breakthrough in virtual reality, internet of things, and intelligent systems built on big data and machine learning, that accelerates the proliferation of cyber-physical systems where the boundary between physical infrastructure and digital platform is blurry. 
 

With the recent breakthrough in software and mobile technology, digital platforms can be integrated with physical systems to provide mobility services (e.g. Uber and Lyft), retail services (e.g. Amazon and eBay) and content and entertainment services (e.g. YouTube and Netflix), without being subject to geographical boundaries or distribution networks. The rise of digital platform industry, coupled with the global economic transition to experience economy, provides the technological and market foundation for future transportation system focusing on its core business of moving people from A to B.

 

 

4. Where is it headed?

 

Current and future trends in transportation, including connected cars, autonomous vehicles, electric vehicles, Internet of things, will only help strengthen the concept of MaaS, rather than obfuscating it. Again, the global economic transition from products to experience and the growing blurriness between physical system and digital platform is what, I believe, is driving this transformation from transportation as an infrastructure/manufacturing focused industry to a more experience and value focused industry, allowing non-traditional companies, like Apple and Google, to have a competitive advantage over more traditional car manufacturers and civil engineering firms.

 

So it is not difficult to predict the future of MaaS. Because of this shift in economic structure and technological advancement, one that builds the most efficient and cost-effective cyber-physical platform that enables users to mix and match physical systems with digital services and that provides users with seamless connections to a wide range of mobility services and providers will be the one that will eventually take over and lead the future of MaaS, or transportation industry at large. In essence, shifting focus from products to experience, and from hardware to software, is what drives this transformative change. And that's why I envision future innovations in transportation will likely come from software and IT companies, not from hardware companies. 

 

To that end, I believe Google and Apple are the strongest contenders in the age of MaaS, not Toyota or Hyundai, or even Tesla.

 

 

 

 

 

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