What MaaS Really Means For Automakers

As with nearly every issue in auto technology, there’s a wide difference of opinions on mobility-as-a-service (MaaS).

Some industry professionals and pundits believe it’s the bright, shining future of the vehicle business, while others argue it’s either a fad, a niche market, or both. Still, there’s little doubt that it’s already had an impact – think of how many people call up an Uber or Lyft on smartphones – and will continue to grow, at least to some extent. According to market researcher Reports and Data, the MaaS market will expand more than eight-fold over the next few years, from just over $42Bn in 2018 to $372Bn by 2026. This means that, no matter what, automakers and fleet managers will have to adapt to this shift. How best to take advantage of this?

For carmakers, the first is to target and attack the likely customer base. That, of course, means those already involved in the MaaS space. Lalit Katare of India’s Allied Market Research said that “for instance, in the Indian market Mahindra and Mahindra announced a partnership with cab aggregator, Ola, to supply 40,000 cars in the coming two years and Tata Motors had an agreement with Uber for adding 20,000”. That former deal was lucrative, being valued at around $400M. We don’t have details on the latter but it was certainly considerable.

Another obvious target market segment is car rental agencies, since they are and will be on the forefront of MaaS developments. After all, said Avis Budget Group vice-president of fleet ventures Ohad Zeira: “MaaS and rental are just two sides of the same coin. You can ‘rent’ a car for a minute, an hour, a week, a month or a year. You can rent cars for one way or a round trip.”

As with nearly every other major car rental agency, Avis has been very active in the MaaS segment in the past few years. In 2013 it bought short-term car sharing company Zipcar for a cool $500M. That financial commitment, plus the fact that it maintained the mobility brand, indicates the high level of priority it put on its new acquisition. Although it’s a bit coy about how many vehicles Zipcar has on the road, it does boast that the brand is able to “take away the need for more than 415,000 personally owned cars”.

Automakers and their tier suppliers that develop and maintain good relationships with fleet operators of that size can count on at least some degree of recurring business as the fleets are refreshed and maintained. One factor that needs to be addressed, for players in the MaaS segment, is its sharing aspect. Often, users of MaaS solutions are willing to sacrifice a certain degree of comfort and/or privacy in order to get from point A to point B.

This goes against the classic approach of the automobile business, in which a car is designed with personal or family use in mind. At best, vehicles destined for constant multi-passenger use have been niche items. It’s very possible they won’t be in the future, so carmakers should adapt some of their products and designs for this segment accordingly.

Speaking of design, we can expect a big shift in this with any significant take-up of MaaS, can’t we? Not necessarily, at least not yet. “I would say that the [prototypes] of autonomous vehicles are even surprisingly little different than conventional cars,” said Piia Karjalainen, senior manager at ERTICO-ITS Europe and coordinator of the MaaS Alliance in Brussels.”In the era of automation the cars will become working, entertainment and relaxation pods with an endogenic connection with media consumption.”

However, those entities which stand to make money from our drive towards autonomy should look outside the automobile, too. Karjalainen added: “Maybe an even bigger question from the MaaS perspective is the design of second-generation transit hubs and stations so that they enable a seamless experience and high-quality information while [a rider is] transferring from one mode or service to another.”

This illustrates another important consideration for those selling into the MaaS segment. It isn’t just one mode of transportation, it often involves several. Many consumers of MaaS solutions frequently use public transportation options too. This is because of the cost issue, of course, and the fact that a metro train, streetcar or even a bus can be the quickest way to get somewhere in an urban or dense suburban environment. The downside is, naturally, the aforementioned transferring process. The manufacturer or service provider that can best innovate this in terms of convenience and comfort stands to do very well in the MaaS segment.

In the end, though, those who can offer a complete package will probably win. According to Karjalainen, if a combination of mobility options (including bicycles, short-term scooter rentals, etc.) can be effectively provided “those different transport solutions establish an offering which can provide a ‘no matter when and where, it’ll get you there’ service level that’s similar to car ownership”.

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