David Hensher PhD, FASSA, is Professor of Management and Founding Director of the Institute of Transport and Logistics Studies (ITLS) at The University of Sydney Business School.
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The Reason Mobility as a Service (MaaS) is such a Challenge
David A. Hensher
The Setting
There is growing interest in ways to improve mobility services. This interest has emerged under the title of Mobility as a Service (MaaS), broadly defined as a type of service that, through a digital platform, enables users to plan, book, and pay for multiple types of mobility service. Simply put ‘A one-stop travel management platform digitally unifying service inquiry, purchase and delivery’. Powered by digital technology, mobility suppliers, and those who bring them together through some aggregation framework (typically acting as a broker) to deliver an extended set of mobility choices, MaaS is seen as an ecosystem that can, through appropriate incentive-based regulation, offer a way forward for government and other interested parties to achieve a wide range of sustainability objectives such as reducing transport emissions and traffic congestion through, in particular, reducing private car ownership which translates to less car use and less traffic congestion.
MaaS has generated a huge amount of interest as a prospective way to garner a greater commitment to mobility activity that aligns with achieving sustainability objectives. At the same time, MaaS gives travellers greater choices through targeted information on multi-modal journey planning with the support of a digital platform. While this all sounds very appealing, we have yet to see a MaaS product that is a successful business model and which offers various multimodal bundles through a subscription plan, despite a number of applications such as Whim in Finland, UbiGo in Sweden, and Stadtwerke Augsburg in Germany. With rare exception, there is also no evidence on how MaaS in an urban setting has contributed to achieving broad societal objectives through reduced private car use and hence emission savings.
We highlight a number of issues that are linked to the ongoing challenge facing MaaS. Given that unpackaged service levels of each mode are exactly the same as those offered as packaged modes, we do not know whether the gain in utility by offering packaged services as the sum of unpackaged services is utility adding (or whether the loss in utility is also a possibility). If true, then what needs to be added in to increase expected utility? The considerations include financial and/or non-financial incentives, and content and functionality of a digital platform as a way of simplifying/reducing the effort required in making mobility decisions. For many people, they might be satisfied with what they already do, and exposing them to alternative mobility options through an App and packaging mobility services with incentives including multiservice incentives, may have no impact on their travel behaviour. This is the challenge and needs to be tested. Central to this challenge is identifying and quantifying what additional attributes and constraint changes are necessary to get an individual to move to a consideration stage (at least at this very early stage of persuasion in the diffusion of innovation) and then into an actionable testable mobility choice outcome.
The Challenge
Think about it; MaaS is essentially the same service levels of each mode separately and currently offered; and as a separate offer based on the same service levels, why would the offer of telling someone they can use particular modes at the same service levels through a digital platform (App) (if no relevant incentives – not necessarily financial) be of sufficient difference to change travel behaviour?
Think of MaaS as adding another attribute (maybe more than one attribute) to an already unchanged set of attribute levels on unpackaged modes. This latter feature may explain why it appears to not be attractive enough for most people. Also, we know that many people are (sufficiently) familiar with travel options and know how to combine them without having to use an App. We should give the public more credit about knowing than is typically claimed in the MaaS deliberations. I call this the framing of MaaS.
Let us use an example. Assume a person uses the car and the car trip is 39 minutes, parking cost is $20, tolls $10 but door to door. A multimodal trip without any discounts to what is on offer as separate modal services is a 10 minutes’ walk to the train, a 5 minute wait for the train, 50 minutes on the train, a $5 fare and a 10 minutes’ walk to the destination. What does MaaS do? We could tell you about this non-car trip if you did not already know!
But knowing about an often inferior good (in terms of attributes that matter) is not enough to change travel behaviour, a reason why someone does not use it at present. So, what else needs to be on offer? For a start, we need to make the private car less attractive (something many of us have been promoting for years), which seems to not be possible or increasingly very difficult without serious reform in road use charging, and/or make the modal components of the alternative more attractive. But this latter initiative can happen outside of MaaS (planners and service providers have been doing this for years); so, if the additional attribute(s) associated with MaaS that is (are) claimed to represent the appeal of MaaS is (are) not significant, MaaS may add no utility at all. So, what is this missing attribute(s)? That is the crucial question. This comes down to what I refer to as differential effort and seamlessness beyond what is already known and available being the missing ingredient. Is the effort of engaging in a multi-modal interrogation via a digital app a sufficient investment in return for an expected utility gain?
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In 2016 I published a blog article titled Moonshots for Australia: 7 For Now. It’s one of many I have posted on business and innovation in Australia. In that book, I highlighted a number of Industries of the Future among a number of proposed Moonshots. I self-published a book, Innovation in Australia – Creating prosperity for future generations, in 2019, with a follow-up COVID edition in 2020. There is no doubt COVID is causing massive disruption. Prior to COVID, there was little conversation about National Sovereignty or supply chains. Even now, these topics are fading, and we remain preoccupied with productivity and jobs! My motivation for this writing has been the absence of a coherent narrative for Australia’s business future. Over the past six years, little has changed. The Australian ‘psyche’ regarding our political and business systems is programmed to avoid taking a long-term perspective. The short-term nature of Government (3 to 4-year terms), the short-term horizon of the business system (driven by shareholder value), the media culture (infotainment and ‘gotcha’ games), the general Australian population’s cynical perspective and a preoccupation with a lifestyle all create a malaise of strategic thinking and conversation. Ultimately, it leads to a leadership vacuum at all levels. In recent years we have seen the leadership of some of our significant institutions failing to live up to the most basic standards, with Royal Commissions, Inquiries and investigations consuming excessive time and resources. · Catholic Church and other religious bodies · Trade Unions · Banks (and businesses generally, take casinos, for example) · the Australian Defence Force · the Australian cricket teams · our elected representatives and the staff of Parliament House As they say, “A fish rots from the head!” At best, the leadership behaviour in those institutions could be described as unethical and, at worst….just bankrupt! In the last decade, politicians have led us through a game of “leadership by musical chairs” – although, for now, it has stabilised. However, there is still an absence of a coherent narrative about business and wealth creation. It is a challenge. One attempt to provide such a narrative has been the Intergenerational Reports produced by our federal Government every few years since 2002. The shortcomings of the latest Intergenerational Report Each Intergenerational Report examines the long-term sustainability of current government policies and how demographic, technological, and other structural trends may affect the economy and the budget over the next 40 years. The fifth and most recent Intergenerational Report released in 2021 (preceded by Reports in 2002, 2007, 2010 and 2015) provides a narrative about Australia’s future – in essence, it is an extension of the status quo. The Report also highlights three key insights: 1. First, our population is growing slower and ageing faster than expected. 2. The Australian economy will continue to grow, but slower than previously thought. 3. While Australia’s debt is sustainable and low by international standards, the ageing of our population will pressure revenue and expenditure. However, its release came and went with a whimper. The recent Summit on (what was it, Jobs and Skills and productivity?) also seems to have made the difference of a ‘snowflake’ in hell in terms of identifying our long-term challenges and growth industries. Let’s look back to see how we got here and what we can learn. Australia over the last 40 years During Australia’s last period of significant economic reform (the late 1980s and early 1990s), there was a positive attempt at building an inclusive national narrative between Government and business. Multiple documents were published, including: · Australia Reconstructed (1987) – ACTU · Enterprise Bargaining a Better Way of Working (1989) – Business Council of Australia · Innovation in Australia (1991) – Boston Consulting Group · Australia 2010: Creating the Future Australia (1993) – Business Council of Australia · and others. There were workshops, consultations with industry leaders, and conferences across industries to pursue a national microeconomic reform agenda. Remember these concepts? · global competitiveness · benchmarking · best practice · award restructuring and enterprising bargaining · training, management education and multiskilling. This agenda was at the heart of the business conversation. During that time, the Government encouraged high levels of engagement with stakeholders. As a result, I worked with a small group of training professionals to contribute to the debate. Our contribution included events and publications over several years, including What Dawkins, Kelty and Howard All Agree On – Human Resources Strategies for Our Nation (published by the Australian Institute of Training and Development). Unfortunately, these long-term strategic discussions are nowhere near as prevalent among Government and industry today. The 1980s and 1990s were a time of radical change in Australia. It included: · floating the $A · deregulation · award restructuring · lowering/abolishing tariffs · Corporatisation and Commercialisation Ross Garnaut posits that the reforms enabled Australia to lead the developed world in productivity growth – given that it had spent most of the 20th century at the bottom of the developed country league table. However, in his work, The Great Reset, Garnaut says that over the next 20 years, our growth was attributable to the China mining boom, and from there, we settled into “The DOG days” – Australia moved to the back of a slow-moving pack! One unintended consequence of opening our economy to the world is the emasculation of the Australian manufacturing base. The manic pursuit of increased efficiency, lower costs, and shareholder value meant much of the labour-intensive work was outsourced. Manufacturing is now less than 6% of our GDP , less than half of what it was 30 years ago!
