MaaS: The Mobility Revolution Coming to North America

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Introduction Transport has always been one of the largest greenhouse gas (GHG) emitting sectors, but in recent years it has overtaken electricity generation as the most emitting sector in the US and in many of the world’s largest economies.

Ongoing urbanisation in North America has led to worsening traffic and congestion in cities across the US and Canada. The former has registered a 160% increase in urban population since 1980, which has significantly increased vehicle miles travelled (VMT) in cities. Traffic congestion increases localized air pollution and has a negative impact on the economy and productivity as people are stuck in traffic at the expense of being economically productive. These trends prompt questions around whether there are more sustainable ways to get around our cities.

Urban passenger transport has already been disrupted by the rise of transport network companies (TNCs), such as Uber and Lyft. In 2015, only 15% of Americans had ever used a rideshare service, but in the following year that number jumped up to 36%. Ride-hailing and ride-sharing provide mobility without the hassle of driving, parking, owning a car, insurance and maintenance, planning around public transport timetables, or waiting at bus or metro stops.

However, in many metro areas the rise of ride-hailing has increased traffic congestion, as drivers often drive around passenger-less waiting for their next fare.

One transport concept that capitalizes on the increasing use of shared mobility and has potential to alleviate congestion and pollution problems is mobility-as-a-service (MaaS). MaaS is the integration of multiple forms of transport, both public and private, to create a seamless mobility system.

A MaaS system brings planning, booking, and payments for multiple modes of transport into an integrated platform. In the most developed MaaS systems, customers can purchase mobility service packages instead of owning individual modes of transport, such as a private car, bicycle, or monthly metro card. Indeed, it is this convenience (thereby cutting down on “app fatigue” from switching between different apps) that will help drive increased MaaS adoption.

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Defining MaaSThere are multiple levels of MaaS integration. According to the topology developed in Sochor et. al. (2017), the first or most basic level allows for multimodal trip planning. Examples of this first level can be seen somewhat in the Google Maps trip-planning functionality, as well as other apps, such as Citymapper. The second level of integration is the ability to book and pay for rides with multiple different transport providers through one app. Today we see that capability emerging at Uber and Lyft with their integration of micro mobility and public transit in some cities, as well as some city transit apps.

The third level of integration iinvolves the bundling of subscriptions or contracts for multiple modes of transport on one platform. The user would not have to book individual trips but could have a monthly pass to use public

transit as well as a certain number of miles of ride-sharing or uses of bike-sharing for a monthly rate paid to the MaaS provider. Only three “Level 3” schemes have been designed to date, none of which are available in North America.

Whim, a MaaS platform based in Helsinki offered by MaaS Global, is the most sophisticated Level 3 scheme. Residents of Helsinki can use the Whim app to plan and pay for all modes of public and private transport in the city, from train and taxi to bike-share and carshare, or any combination of these. Users have the option to pre-pay a monthly subscription or pay as they go with a linked payment account.

The fourth level of MaaS integration incorporates societal goals, by implementing incentives that influence travel behaviour. For example, this would include penalising trips at rush hour or for driving downtown.

Fig. 1 Total Addressable Global Mobility Market, 2020 (USD millions)

Ride Hailing

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Source: inspiratia, Goldman Sachs 2019

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However, Level 4 MaaS schemes are still aspirational as none currently exist. The massive size of the global mobility sector means that, depending on how one defines the sector, the total addressable market (“TAM”) that MaaS providers have as their target is comfortably above US$7 trillion in 2020.

The bundling of mobility on a single platform presents a shift away from ownership-based transport systems towards access-based ones. This has positive implications from both a sustainability and traffic point of view. In Helsinki’s experiment with Whim, the aim is to make it so convenient to get around using the options available on the platform that people forego their personal vehicles because the alternative is more appealing.

Already Whim users ride on public transit for 63% of their trips, more than the average urbanite in Helsinki who only uses public transport 48% of the time. This has positive implications for the sustainability of MaaS and its ability to get people out of private vehicles.

Sustainability potential of MaaSWhether MaaS systems will help urban areas meet their sustainability goals depends on the system’s ability to reduce emissions and congestion. So far there are limited studies on the emissions and congestion impacts of MaaS, but one study in Nordic countries shows reductions in both CO2 emissions and vehicle kilometres travelled (VKT). To reduce both emissions and congestion, a MaaS program must be structured so as to incentivize a transition away from private vehicle ownership toward fleet ownership and operation, P2P vehicle sharing, and public transport systems.

Pilots of MaaS in Europe have shown that it can help reduce private car use. During the pilot of Smile in Vienna, 21% of participants reduced private cars usage. During the trial of UbiGo in Sweden, 44% of participants reduced their car use. Positive perceptions of private car use also decreased during the pilot, and support for alternative modes increased. To change perceptions and compete with car ownership, MaaS has to offer “something pretty spectacular,” according to Krista Huhtala-Jenks, the head of ecosystem of MaaS Global, Whim’s parent company. What MaaS can offer is convenience. The more payments

and options are integrated into MaaS, the more likely people will see alternative modes as genuine competition for a personal vehicle. MaaS’s potential to make passenger transport more sustainable in cities lies in its ability to change travel behaviour with very little additional infrastructure or vehicles. This is crucial in cities that are strapped for funding for public transit.

In addition to providing convenient integration, European MaaS programs have been successful at reducing emissions and car use because they have featured public transit on their platforms and have worked closely with governments to implement their solutions. According to a survey conducted by the American Public Transit Association (APTA), most people still see public transit as the “backbone” of a transport system and 74% of millennials said they would use a MaaS app that includes public transit. This indicates that MaaS could have an important role to play in reviving public transit’s role in our cities.

Electrification of fleets can reduce emissions and air pollution, but with limited integration with public transport will not be effective at reducing congestion. Whether or not North American MaaS programs can offer the same sustainability benefits as European equivalents will depend on the extent to which they integrate public transit and work with local governments.

88Chapter 1 / Embracing the new energy revolution

Status of MaaS in North AmericaWhile there is some debate over the size of the global MaaS market, ride hailing alone is estimated to have reached a global market size of US$108 billion in 2019 with the United States accounting for just under US$40 billion. Due to increased urbanisation, transport demand is shifting to shorter trips throughout the day in more urban areas, which would suit MaaS well. While there is clear demand for more MaaS solutions, there are relatively few fully integrated examples available in North America.

Currently, different modes of transport each require a separate payment method: a bike-share may have one account, ride-hailing another, and public transit its own tickets, while the success of MaaS in Europe centres on public-private

partnerships and higher quality public transit.

MaaS in North America is up against car ownership rates that are higher than anywhere else in the world, as well as an ingrained car culture. TNCs, third-party app providers, and cities are working to change this and satisfy demand for MaaS in cities.

TNCs move towards MaaSTNCs are the largest promoters of MaaS in North America, offering ride-hailing, e-scooters, and bike-sharing services in their apps. Uber and Lyft – which together account for more than 99% of current offerings in the ride hailing sector in North America – have been working to rebrand themselves from ride-hailing companies to mobility platforms.

Fig. 2 Ride-hailing market share & revenue, United States 2019

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Source: inspiratia, Uber 2020, Lyft 2020 9

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Both are adding real-time public transit information to their apps in some cities. So far, this roughly equates to Level 2 of MaaS integration for the modes that also have payment options within their apps. However, while TNCs offer some of the most widely available MaaS solutions in North America to date, questions exist about their commitment to sustainability.

UberCEO Dara Khosrowshahi has proclaimed that Uber’s aim is to become the “Amazon of transportation.” To advance this goal it has joined MaaS Alliance, a public-private partnership made up of organisations largely based in Europe that aim to develop an open market for user-centered new mobility innovation. Uber has also incorporated the short-term rental of e-bikes and scooters into its app. It has a lead on its main competitor, Lyft, based on scope and scale.

Uber also has an advantage over other potential MaaS providers in that it is accelerating its internet of things (IoT) innovations and already leverages big data at scale. It can use insights from data to propose new strategies for cities and consumers. Ideally, Uber would like to integrate all of its services into one app, including ride-hailing, e-bikes, food delivery, and public transit ticketing.

Uber is aiming to team up with cities and public transport agencies to create tailored MaaS solutions. For example,

Summit, New Jersey has signed a partnership with Uber to help get commuters to and from their local rail station. This helps the city avoid using taxpayer money to fund an expensive new parking garage – a multimillion-dollar project – by reducing the number of cars that will park by the station.

This partnership increases convenience for the users, as parking near the train station is challenging, with commuters often wasting time looking for parking. The town estimates that it will save $5 million of expenditure over the course of 20 years as a result of this partnership.

More generally, Uber has integrated public transport schedules in its app in almost 50 US cities. If an Uber rider is heading to a train or transit stop, the app will display upcoming departure times. Uber has also begun to offer the ability to purchase metro and bus tickets in its app with pilot programs in cities such as Denver, Colorado.

LyftLike Uber, Lyft has been moving towards more integrated mobility solutions by incorporating shared bikes, scooters and public transit times into their app. It reports that these measures have encouraged more people to use these travel modes, which are less polluting and congesting.

Now commuters are able to watch on screen where and when transit vehicles will be arriving and bike lanes are now being displayed too. Lyft also has plans to add a comparison tool for time and cost across different modes and recommend the fastest and most affordable options. The company envisions eventually creating a subscription service for all transit types.

However, currently Uber offers the ability to pay for public transit on the app in some cities, whereas Lyft only provides scheduling capabilities.

In 2018, Lyft launched a “ditch your car” promotional challenge in over 30 cities to around 150,000 participants. In exchange for giving up their car for a whole month, participants received about $550 in credit to use for Lyft rideshare as well as bike-share, car-share, and public transit. In the pilot in Chicago, this was broken down into $300 in Lyft credits, $105 for bus and metro services, $45 for a Divvy bike-share pass, and $100 in Zipcar credits. Lyft promotes its shift to MaaS offerings as an effort to reduce reliance on cars in cities.

Lyft is vying with Uber to be the primary way that people get around.

In 2018, it too announced its first subscription plan and step towards

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level 3 MaaS integration: the Lyft All-Access Plan, which is now Lyft Pink. Lyft Pink is $19.99 a month and provides a 15% discount on all car rides and three free rides on Lyft scooters or bikes each month. To recoup the membership fee a user would have to spend around $133 with Lyft, making Lyft Pink an interesting option for a minority of commuters.

Sustainability of TNC-based MaaS SolutionsThe major TNCs already have the largest reach and are perhaps most likely to provide more integrated MaaS solutions at scale.

However, if the future of MaaS in North America is dominated by Uber and Lyft, then the question is whether they will go beyond being a one-stop shop and make serious commitments to reducing traffic and emissions. A model that focuses more on reducing car ownership and increasing public transit use, ride-pooling, and partnerships with cities (such as that of recent market entrant, Via) has much greater potential for reducing emissions and congestion.

Ride-hailing, the primary part of the TNC business, is often in direct competition with public transport. One University of Kentucky study shows that for every year ride-hailing operated in a US city, bus ridership fell by an average

of 1.7%. In obtaining rides that would have otherwise been provided by public transport, TNCs are increasing road congestion and emissions (if not using electric vehicles).

In places where more sustainable options like public and active transportation are not available, the introduction of a TNC MaaS solution would only result in people switching out of their own car into one being driven by someone else, likely often taking trips alone. Uber and Lyft have also not had enough pooled rides to compensate for the emissions or congestion caused by their private rides. Via, on the other hand, offers primarily pooled rides—95% of all rides globally to be exact. For comparison, in New York City, only 20% of Uber and 35% of Lyft rides were shared in November 2018.

Public-private partnerships are at the heart of successful MaaS solutions, and the large TNCs are known to often have mixed relationships with the cities within which they operate. In 2014 Seattle came close to shutting down TNC operations if they didn’t start carrying more insurance. New York City has extended its cap on the number of new driver licenses available to big TNCs over concerns of congestion and low driver wages. To avoid leaving MaaS platforms entirely in the hands of private companies, cities could act like an “app store” for transport, allowing private

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companies to participate, but it is the city that would set the guidelines.

While Uber has said that public transport is one of its main competitors, Via positions itself as a complement to public transit systems, as well as a new transit solution for sprawling auto-centric cities with little transit infrastructure.

As long as the focus of North American TNCs is on increasing ridership and not getting people out of cars, or transitioning their vehicles to ZEVs, they will not be able to reduce both emissions and congestion in cities.

Mobile apps providing MaaSIn addition to TNCs, mapping apps such as Google Maps, Apple Maps, Citymapper and Transit are providing MaaS solutions without supplying any vehicles. Some are considered only Level 1 MaaS integration—such as Google Maps, Apple Maps and Citymapper—allowing users to plan but not book multimodal trips. Transit has taken MaaS integration a step further by incorporating in-app booking in certain cities. Other apps add their own twists to trip-planning and booking: Migo integrates on-demand rides such as taxi, carshare, bike-share and scooter; Cowlines allows users to see the carbon footprint of their trip; and Free2Move is experimenting with integrating shared mobility

in Washington, DC.

TransitTransit is a Montreal-based transport planning app, with the stated purpose of being, “...the killer app for urban transportation… By making public transit simpler, and alternative modes more accessible, we facilitate billions of car-free trips.” To do this, Transit works to make public transport more efficient and attractive to riders. Its app displays arrival times of nearby transit as well as planning routes and journey times.

This helps reduce the risk of riders not knowing whether they arrive at their destination on time with public transport, forcing them to call a taxi. While the TNC’s share this desire to reduce car use, it is often at odds with their business model of having thousands of cars in as many cities as possible.

Transit is perhaps the closest to providing Level 3—or subscription level—MaaS integrations with public transit. In some cities, Transit already offers booking and payment options without having to leave the app for bike-share and public transit, and it has plans to incorporate payments for free-floating scooters.

Transit’s business model, like Via’s, focuses on partnering with cities. In exchange for access to

public transit data to integrate into the app, Transit sells its consumer mobility data to the cities. Public authorities allow Transit to incorporate their tracking data, sometimes in exchange for Transit completely taking over the municipal transport tracking app, saving cities money. For instance, Transit allows customers in St. Louis, MO, the ability to plan and book multi-modal trips, having replaced the city’s previous trip-planning app. Moreover, in St. Louis, Transit also allows users to book rides with Uber or Lyft. In addition to St. Louis, Transit has partnered with transport authorities in Boston, Maryland, Santa Clara, CA, Tampa, and Montreal.

Free2MoveFree2Move is a mobility platform launched by the French car company Peugeot (“PSA”). PSA launched the platform to compete in a rapidly transforming mobility space, especially as a mid-tier car company. While Free2Move itself offers car-sharing, it is also integrating other modes of transport into its app. Primarily based in Europe, Free2Move is expanding into North America by offering its free-floating car-share in Seattle, Portland, and Washington, DC. Free2Move is starting to experiment with more integration in Washington, DC.

Users can reserve or unlock carsharing, e-scooters, and

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bike-share. They do not have any integration with public transit yet but are focusing on car-sharing and other bookable vehicles, like e-scooters and bike-share. In addition to providing its own free-floating car-sharing fleet, Free2Move has partnerships with Car2Go car-sharing, Bird scooters, Capital Bikeshare, Lime scooters, Skip scooters, and Jump e-bikes. In Europe, Free2Move offers fleets of hundreds of electric vehicles (EVs).

Cities transforming transit with MaaSCities have a central role in theadoption of MaaS solutions. Rather than partnering with private companies, some cities are working on their own MaaS offerings. Cities often know best where their transport

system is working well and what communities need more access to mobility. By being highly involved in the design of MaaS platforms, cities and municipal transit agencies can better ensure that their goals and the needs of their residents are being met.In the US, public transit ridership is down 5% over the past decade, yet the need for it and complementary solutions continues to increase as urban populations are projected to grow. Underfunding and insufficient maintenance have led to a decline in the quality of service in terms of frequency, punctuality, and overall experience.

To reverse this trend and meet consumer needs of reduced wait times and more robust service, transit agencies can partner

Fig. 3 Public transit market growth scenarios (ex. ride-hailing), North America 2019 -2030

Source: inspiratia, APTA 2019

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with private groups to extend their existing infrastructure, use data to better understand movement of people and consumer behaviour in their jurisdiction, and develop demand-response solutions to stay flexible to changing consumer demand. Integration may be able to benefit public transit providers by bringing multiple services together and offering a more flexible transport package to the consumer. Private companies often have better expertise than public institutions in getting a MaaS app up and running, as they tend to have more resources and workforce skills in the technology.

City-led MaaS programs may also have ambiguous impacts on congestion and emissions, depending on what their primary goals are. Efforts to increase mobility access may increase congestion, pollution, and emissions if people who use public transport switch to motorized modes (especially if they are not EVs). However, this effect may be balanced if the program is lucrative enough to get people who used to drive to use alternative modes of transport. The impacts will be determined by the aims of the city along with the levels of integration and convenience that the MaaS system provides.

Improving MaaS sustainability in the future

MaaS by itself offers the potential for some sustainability benefits by competing with the convenience of cars. MaaS could perhaps be even more convenient and effective at getting people out of cars by integrating with more physical infrastructure. A mobility hub is the physical integration of multiple modes of mobility, which would complement perfectly the digital integration that is already happening in MaaS.

Mobility hubs are locations and infrastructure where travellers can connect to or rent various forms of transport, such as a parking garage by a commuter rail station with a bikeshare station, car-share EVs, a bus stop, and a designated ride-share pick up area. At a mobility hub with MaaS a traveller could seamlessly hop off one mode of transport onto another. They should be located near concentrated points of employment, housing and/or recreation. Mobility hubs might also provide walking and biking infrastructure with appropriate parking and charging, support services like real-time travel information and parcel delivery lockers. Cities that have planned the creation of mobility hubs are San Diego, San Francisco Bay Area,

Minneapolis, and the greater Toronto area. Metrolinx in Toronto, for example, has already created 51 mobility hubs and Minneapolis is starting a pilot program with mobility hubs, unveiling four in September 2019 with plans to build 12 in total. These hubs consist of a bus stop, designated bike-share and e-scooter parking and way-finding signage with travel times to points of interest.

The creation of mobility hubs could be crucial to help make North American transport greener, especially since the built environment and culture so highly favours the private vehicle. One anticipated benefit of mobility hubs is reducing the need to drive alone. Well-placed mobility hubs could help get people out of private vehicles for the 45% of trips that are under three miles. With more travel choices and supporting amenities, there will be fewer reasons to own a car.

Better connecting bike and pedestrian infrastructure can get people out of vehicles all together, helping to reduce congestion. By providing amenities like EV charging stations, mobility hubs could also help reduce emissions and air pollution by promoting EVs.

Once autonomous vehicles fully enter the market, mobility hubs could be essential infrastructure to enable people to catch a ride, but also allow for a place for AVs to

be stored and charged in between rides. To make future transport more sustainable, shared, active, and public transport need to be more convenient than personal car ownership. MaaS with mobility hubs could help bring that future.

ConclusionMaaS has the potential to be an improvement on our current uncoordinated transport systems and enhance urban mobility at a lower cost with less congestion and environmental harm. However, North America still has very little experience with MaaS platforms and will have to undertake many more trials before finding solutions that work in each city.

The technology behind MaaS platforms now will likely be the

backbone of future connected AVs, especially since companies like Uber are developing plans in this area. The behaviour patterns that are established by these early MaaS platforms in regard to how much of transport is shared, active or public, will have a great impact on congestion and pollution in cities and may inform how future AVs are integrated into the larger transport system. inspiratia data yields significant growth projections for the North American ride hailing market in the coming decade even under low-growth scenarios, potentially reaching a market size north of US$350 billion by 2030 in high-growth circumstances.

Convenience is one of the prime benefits of MaaS. By including all of the available companies in one platform, MaaS can remove

Fig.4 Ride-hailing market growth scenarios, North America 2019-2030

Source: inspiratia, APTA 2019

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barriers to forms of transport that may help reduce emissions and congestion. They can also help refocus public transit offerings on ever-changing customer demand, by offering a more flexible variety of transport options.

At the same time, the increasing popularity and integration of micro-mobility offerings in the MaaS platforms and TNC offerings in North America lead us to project rapid growth in the sector in addition to the growth expected in the ride hailing sector as well with base-case projections in the range of US$200 billion market size by 2030. For MaaS to really take off in our urban environments, it is important that it is accessible to everyone.

Currently, many MaaS offerings are not accessible to lower income and older residents, since most platforms require the use of a smartphone and to having access to a credit card or bank account. Relationships with municipal governments will also be key in further MaaS development and will help determine how aligned MaaS platforms are with cities’ goals of reduced congestion.

These solutions are applicable across huge swaths of the mobility sector including commercial transport and freight services and are part of a total addressable global market projected to grow well above US$8 trillion by 2030.

Fig. 6 Total addressable market growth projection, Global 2019-2030

Fig. 5 Micro-mobility market growth scenarios, North America 2019-2030

Source: inspiratia, Goldman Sachs 2019

Source: inspiratia, McKinsey & Co. 2019

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The sustainability of North American MaaS is also challenged by the behavioural habits and infrastructure prevalent in the region. In many cities driving is the norm, often because public transit is not reliable and active transport is not available or safe. It will be more difficult in these cities to get people out of their cars and into more sustainable options. For this reason, partnerships with the local government could be particularly helpful since MaaS public-private partnerships can provide budget relief as the city works to build and maintain its public transport infrastructure.

The sustainability of MaaS programs in North America has

mixed prospects. TNC-based MaaS models will need to have the aim of increasing public transit ridership and working with cities, rather than increasing ride-hailing, to truly improve congestion and emissions. App-based MaaS models do not have that conflict of interest but will likely be able to better reduce emissions and congestion if that is explicitly part of their goal. Many city-based MaaS programs aim to increase access to mobility, so their sustainability impact will be dependent on whether they get more people out of cars onto transit than they get former non-travellers or pedestrians onto transit and shared mobility.

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