Digitalization Key to Paying for MaaS

While Mobility-as-a-Service (MaaS) subscriber revenue is expected to increase 900% by 2027.

However, there are significant headwinds to the adoption of multimodal end-to-end travel services, which are connected by a single MaaS platform. These were the findings of a Juniper research study published recently, which predicted a monthly subscription model would be key to increasing adoption of MaaS among consumers.

Report author Adam Wears told TU-Automotive that the monthly subscription model has several notable advantages, over the ad hoc, pay-as-you-go model, that Juniper believes are vital to growing adoption of MaaS in the long-term. “By enrolling in a MaaS subscription, travelers are not only able to realize cost savings over conventional transport subscription packages such as rail season tickets but, for that single price, gain access to a wealth of additional transport modalities,” he said.

The experience of using an integrated platform to book and manage travel would also be a great benefit, particularly for those frequent travelers as commuters and business representatives. One major ongoing challenge with MaaS, however, is the fragmentation inherent to MaaS ecosystems. “In any given deployment, each provider will seek to ensure that its service receives a fair share of passengers and revenue, which concentrates a large amount of power in the hands of the platform provider,” Wears said. “That’s a level of control that dissuades some transport providers from participating in MaaS projects.”

IoMob CEO Boyd Cohen agreed that is one of the biggest challenges facing trans-national, or even national, MaaS projects. “There’s so much diversity and fragmentation of ticketing and payment models in cities around the world, to accommodate that is challenging,” he said. “Even the transit agencies that are modernizing their systems are not always allowing third parties provide payment for their services on their behalf, or don’t offer the ability to sell multi-use tickets.”
If those issues can be overcome, the platform becomes borderless and interoperable by default and anyone can connect and book anywhere in the world, using a payment gateway that’s already installed on the app. “Rail operators, national governments and others have a mandate and an interest to enable their citizens to roam around the country with one app,” Cohen said. “The question is whether the big investor-backed private companies have the incentive or desire to have their services sold through a third party.”

In addition, Wears noted MaaS requires high-quality, easily accessible transportation data to function. “This data is scattered, however, across multiple stakeholders, such as public transit agencies, private transit providers, even commuters, and points to a significant problem in the space with siloing and interoperability,” he said.

Account-based ticketing, which lets travelers use mobile devices, travel cards or wearables to prove travel eligibility and be billed on account, will be another critical component to successful MaaS programs. “Account-based ticketing enables a shift from closed loop ticketing solutions to open loop solutions, where the same device, token or payment mechanism can be used for multiple ticketing systems, thus enabling flexible usage patterns and the aforementioned subscription models,” he said.

Another major hurdle to the deployment of MaaS is the lack of digitalization within transport networks. Wears pointed out this is not an issue for the most part in developed countries, where public transportation networks are digitalized to a high degree and users possess appropriate technological means and knowledge. “However, in developing regions, such as Africa and the Middle East and Latin America, public transportation networks are barely, if at all, digitalized,” he said. “This is particularly unfortunate given that the developing world is home to some of the most congested, emission-producing cities in the world.”

Wears said the possibilities posed by MaaS in these regions could help, at least in some small part, to improve environmental and lifestyle conditions but the absence of suitable infrastructure makes that an impossibility. “This is not to say, however, that MaaS providers are not attempting to bridge this gap,” he added. “In recent years, some platforms have begun integrating transit data gathered by local volunteers into their apps, rather than relying on open data provided by local authorities.” Wears said while he believes these markets are worth exploring, providers should consider these regions as long-term projects to be overcome with innovative solutions.

The report also discussed how business travelers globally would use MaaS platforms to complete 25.7 million business trips annually by 2027, as companies look to minimize costs associated with corporate travel, such as fleet maintenance. Wears said that while business travel is unlikely to return to pre-pandemic levels, at least in the short- or medium-term, business travel will still occur. “Therefore, we believe that there are a wealth of opportunities for platform providers in this space to not only help businesses manage the costs associated with business travel, but also drive reductions in the significant amount of emissions and congestion generated by business travelers,” he said.

Cohen also sees corporate-geared MaaS solutions as a potential area for rapid growth as organizations look to reduce their carbon footprint and nudge employees towards more sustainable modes of transportation. “We’re seeing rapid growth in shuttle bus uses for large volumes of corporate employees, and companies are paying for that, and these apps can also digitalize the receipting process,” he noted. “If they can encourage people to choose shared mobility, that’s better for the planet, too.”