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Futurebustransportcontractsunderamobilityasaservice(MaaS)
regimeinthedigitalage:aretheylikelytochange?
David A. Hensher
a
a
Institute of Transport and Logistics Studies (C13), The University of Sydney Business School, NSW 2006,
Australia
* Corresponding author: Institute of Transport and Logistics Studies, The University of Sydney Business School,
NSW 2006, Australia+61 (0)2 9114 1824 david.hensher@sydney.edu.au [email
Keywords:
Mobility as a service (MaaS), public transport contracts, disruption technologies, digital technology intervention
Classification codes:
R410, R480
ABSTRACT
The digital age has opened up new opportunities to improve the customer experience in using public
transport. Specifically, we see the role of smart technology in the hands of customers as the new rubric
to deliver services that are individualised to the needs and preferences of current and future public
transport users. This frontline of service delivery has become known as mobility as a service (MaaS)
whereby an individual can book a service delivered through a range of possible modes of transport.
Variations are bus-based options that include smart bookable ‘point-via-point-to-point’ services that
offer options on travel times and fares as well as the continuation of conventional bus services where
the market for smart MaaS is difficult or inappropriate to provide (e.g., contracted (often free) school
bus services). This paper presents a number of positions that could potentially represent future
contexts in which bus services might be offered, recognising that a hybrid multi-modal state of affairs
may be the most appealing new contract setting, enabling the design of contracts to be driven by the
mode-neutral customer experience, and the growing opportunity to focus on MaaS. We suggest that
the adrenal rush for mobility services, however, may not deliver the full solution that supporters are
suggesting.
1. Introduction
“The mobility systems of the future are likely to be very different from what exists in most
of the world today. The individual traveler is at the heart of this evolution, so consumers
will need to be open to adopting new technologies and services. However, both the public
and private sectors will have roles to play in paving the way.” (Hannon et al. 2016)
A number of transport summits in recent years (e.g., Transport for NSW 2016) have looked
to the future of transport as informed by autonomous vehicles, big data analytics, internet of
things, disruptive technologies, and customer service in the digital age. Closely connected to
these developments is the likely new context in which public transport services might be
provided, facilitated by this new digital age with smartphone apps for easy access to
bookable and turn up and use services, including driverless vehicles of all types (cars, taxis,
buses, trains) in which ‘mobility as a service’ (MaaS) comes to the fore with no need for
individuals to own a car, and with regulatory reform (and contracts) that supports a customer-
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focussed MaaS model in which point-to-point transport can be provided via smart
technology. The case for single mode regulation will need to be reconsidered when the
provision of mobility services is drawn from many modal offerings. These offerings will
include the shared economy typified by car clubs, lift share (such as BlaBlaCar), the ‘car next
door’ and various manifestations of taxis (and buses of varying sizes), with different notions
of collective or individual ownership.
MaaS as defined in https://en.wikipedia.org/wiki/Mobility_as_a_service_(transport),
‘combines transport services from public and private transport providers through a unified
gateway that creates and manages the trip, which users can pay for with a single account’.
Users can pay per trip or a monthly fee for a limited distance. The key concept behind MaaS
is to offer travellers mobility solutions based on their travel needs
1
. Fishman summarises
these options graphically in Figure 1.
Figure 1 Future mobility options (Fishman 2012)
This paper is a think piece
2
, raising issues that need considering as we move forward that
are focussed primarily on future bus contracts in the presence of MaaS. In order to place this
into context, we synthesise the issues that MaaS brings up in the market for servicing
customers. Through having a better understanding of what MaaS is, and might be in the
future, we can start to see the types of issues that might impact on the future structure of
existing bus contracts, and indeed if we even need mode specific contracts that might, in
time, be replaced with mobility contracts. The questioning of the future of bus-specific
contracts as currently specified in the presence of a scaled up MaaS is thus the real intent of
1
The Mobility as a Service (MaaS) Alliance has been established in 2016 as a public-private partnership
dedicated to creating the foundations for a common approach to MaaS, unlocking the economies of scale needed
for successful implementation and take-up of MaaS in Europe and beyond. http://maas-alliance.eu/
2
In part motivated by the many workshops the author has attended in the last 12 months on the growing interest
in MaaS.
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the paper, designed in part to get service providers and regulators thinking ahead on what
this might mean for future regulations and contract design.
The paper is structured as follows. The next section focuses on some examples of recent
implementation and/or planning for MaaS schemes in a number of countries. This is followed
by a discussion on what MaaS might mean for future public transport contracts, given future
service delivery options in the new digital age. One of the central issues of MaaS is the move
to greater (more efficient) use of cars, be they autonomous or with a driver, and what this
might mean not only for conventional public transport but also congestion of the road
network. It is unclear which way this debate will go, and indeed whether congestion will
reduce or increase. The next section provides initial thoughts on the opportunity (or not) to
reduce traffic congestion under MaaS, and especially when and if MaaS is scaled up. The
scalability of Maas is an intriguing and unclear matter. A number of key ideas and future
research suggestions are presented in the concluding section.
2. A Brief Overview of MaaS in Practice
The opportunities for public transport to match customer expectation under a MaaS model
are exciting (see Hietanen 2014, Transport Systems Catapult 2015, Kamargianni et al.,
2015, and Martin 2016), but also disruptive in terms of current practices centred around
mode-specific contracts, protected service areas and often under-utilised bus capacity (it
being well known how often buses move ‘fresh air’ plus the driver but no passengers). Has
the time arrived for the digital age to provide the much needed technological spur for the
take-off into the new MaaS era? In New South Wales (NSW), for example, this is clearly
influenced by the Uber experience and the 2016 legalisation
3
of their taxi-like services with
an emphasis on high quality point-to-point customer service bookable through smart palm-
based technology. ‘Uberisation’ of public transport might now be the catch cry to get us all
thinking about future states involving all modes of transport
4
. Many of the MaaS initiatives
are, however, not new and are similar in intent, in respect of customer service, to flexible
transport services including demand responsive transit. What is different today is the ability
to bring such flexible options direct to any interested user via the digital app capability
available on smartphones. This provides a more efficient way to service mobility needs that
is available to all, albeit under certain pricing and service level conditions.
With such a large amount of capacity provided, and often with excess under-utilisation (partly
a consequence of non-permissable passenger pick up in areas outside of contract areas,
such as the return trip from the contract neutral central business district of Sydney),
especially in the off peaks, but a recognition that existing assets may not be the best fit in
delivering point-to-point MaaS (which might benefit by a mix of vehicle types –including cars,
small buses, large buses etc.), if there is a desire by government to relax the modal
regulatory regime to accommodate mixed-mode opportunities offered by one or more service
3
In contrast, the Queensland Government on 21 April 2016 rejected legalisation of Uber styled services. The
Katter’s Australian Party’s private member’s Bill, passed by the Queensland Parliament with Opposition
support, allows transport inspectors to fine Uber drivers up to $2,356, while administrators can be fined up to
$23,560. Paid ridesharing remains illegal in Queensland under current taxi regulations, but the government is
reviewing those regulations.
4
The word Uber has Germantic heritage and refers to ‘being a superlative example of its kind or class’.
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providers, then we are very likely see a huge change in the services available to customers.
This NSW 2016 legislation permitting Uber services also allows any new player to enter the
market as long as their vehicle (which includes mini-buses) has a capacity not exceeding 12
seats. The recent move to a multimodal public transport contract offered in Newcastle,
Australia, involving conventional timetabled (and some school contracted) buses, trains and
ferries (awarded in December 2016 to Keolis Downer) is a good sign of the willingness of a
regulatory setting to accommodate such a plan in Australia, but whether it will relax the mix
of modes in the new contract environment is more of a challenge.
MaaS initiatives are growing very fast throughout the world, especially in Europe.
Kamargianni et al. (2015) identify a number of existing travel services/initiatives where
citizens are offered a form of monthly subscription payment (MOBIB
5
in Brussels,
HANNOVERmobil
6
, EMMA in Montpellier, SMILE
7
in Vienna, and Moovel
8
in Germany).
These typically include a fixed monthly subscription for unlimited public transport use (costing
slightly more than a PT monthly pass) and discounted pay-as-you-go rates on usage of all
other modes such as car and bike sharing and taxi. Customers receive an integrated mobility
bill at the end of each month that includes the basic cost as well as taxi and car/bike sharing
usage fees. These are typically provided through an app or through purchase of a smartcard
ticket. These on-demand services are not included in advance in the subscription package,
but are charged separately at a discounted rate after use. The creation of tailored
subscription mobility packages which include pre-payment of all selected modes in advance,
is a very recent idea with only one current example of a project testing the concept. The
UbiGo trial
9
in Sweden involved 70 households in Gothenburg with 190 users between Nov
2013 and April 2014. They agreed to pay for a “transportation smorgasbord” that included
car-sharing, rental car, taxi, public transport and bicycles in one app, paid at once. A flexible
monthly fee (average 140€/month) allowed users to choose, in advance, the bundles of
transport provision which they felt best met their needs. Advantages stated were that it
became easier to pay for the travel and that the service gave them access to more modes of
travel. Disadvantages were that it was difficult to choose the level of subscription (initially)
and there were problems with the driver’s knowledge of the UbiGo service (app-tickets). All
households in the pilot continued using the service and buying packages after the trial
ended. Interestingly, there were considerable unused travel allocations each month. On
average, 86% of the monthly PT services purchased through monthly subscription were
utilised, while 69% of the car services purchased through the monthly subscriptions were
utilised. The pilot project ended in 2014, but UbiGo says that it planned to re-launch
somewhere in Sweden after late 2016 or early 2017, in co-operation with Ericsson.
One of the most interesting but unsuccessful trials was in Kutsuplus, a city-run “mobility on
demand” transit service in Helsinki
10
. WiFi-equipped minibuses roamed the city's downtown
core and a dispatch system would direct buses to passengers and dynamically update routes
on the fly to pick up more passengers. Pickup points were typically the nearest city bus stop,
usually only a few minutes walk, and payment was arranged through an app - no fumbling
5
http://www.mobib.be/mobib-card_EN.htm
6
www.gvh.de/service/rad--‐auto--‐carsharing/hannovermobil
7
www.smile--‐einfachmobil.at
8
www.moovel.com
9
https://tapahtumat.tekes.fi/uploads/ddb30435/Arby_Hans-8909.pdf
10
https://nextcity.org/features/view/helsinki-kutsuplus-on-demand-transportation-mobility-next-uber
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with transit cards or cash needed
11
. On the last day of 2015, Helsinki Regional Transport
cancelled the Kutsuplus pilot program. There are a few suggested reasons as to why it failed.
First, with a budget of about 3.2 million euros, the service was unable to get more than 15
buses running at a time (this is the scalability requirement). (HSL - Helsinki Regional
Transport - planned to have 100 by 2017, and 2,000 by the year 2020.) By the end of 2015,
the 15 buses were operating for longer hours and serving more people, but it was not
enough for Helsinki, which has a metro, 15 tram lines and a large bus system. Combined,
Helsinki's public transport network provides about 1.2 million rides daily. Just as critically, a
limited schedule means fewer fare-paying riders and fewer fares means more money from
the city is needed to offset the expenses of each trip. As of December 2014, Kutsuplus’
subsidy per trip was around 20 euros, an improvement over the 40 euro-per-trip subsidy
needed 12 months earlier, but still not a great deal for the city. The CEO suggested that
Kutsuplus would have been much more successful if there had been more vehicles … [in]
the pilot program, but he also believed that the challenge in transportation technology is not
the technology in itself, but how the business around it is managed. It appears that Kutsuplus
may have tried to do too much, too soon, without a solid financial backing. But it was not
likely to be just economics that killed Kutsuplus. In a city with a large population of
commuters who travel downtown each day from outlying suburbs, its service area only
included the city centre and rides could not be pre-ordered more than 45 minutes in advance.
Another two pilots are planned in the near future or recently launched in Helsinki and Berlin.
MaaS Global in Helsinki
12
launched its transport subscription service through the Whim app
in late 2016
13
. Whim, has completed pilot testing, and comprises of a smartphone app that
lets the user tailor their own monthly transport plan, setting how many miles of Uber or taxi
travel they want, how many train and bus journeys, number of hours of car hire or car-club
rental and other parameters that each affect the total monthly price. Several options are
being proposed or assessed at present:
o Move on a Whim - Pay as you go to access all the different MaaS options.
Allows users to test out the service with zero commitment.
o Monthly Mobility - Unlimited local public transport and bike share use, with a
monthly quota of points to use freely on taxis, rental cars, long-distance trains
and value-added services. Users can earn extra points by making smart travel
choices.
o Ultimate Freedom - Travel in style on any mode of transport you like, from
every kind of public transport to local taxis and rental cars. Earn extra points
by opting for public transport and use them on life enhancing perks like value
added services or a Tesla for the weekend.
14
11
One user said ‘“If you go to [an] edge area, and make a … trip at 6 a.m., you may be alone in the vehicle. But
on a lively day, a 10-trip combination is typical, with three to four passengers in the vehicle at the same time,” he
says. He adds that when a bus did only have one passenger, at least the next rider was usually nearby. A taxi
would often instead drive, empty, back to the nearest taxi stand. “Even with 15 vehicles only, we reached higher
efficiency than taxi,” he says. “On lively days some three to four trips per vehicular hour.”
12
https://maas.global/
13
See https://eu-smartcities.eu/content/finland-launches-whim-app-new-all-inclusive-mobility-service
14
Some of these applications and evidence are drawn from a literature review in a report by Steve Wright and
John Nelson (2016) as part of a larger study being undertaken by the Institute of Transport and Logistics Studies
on MaaS: a future direction for community transport? This material is used with permission.
