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News Article

Mobility as a Service to Reshape the Automotive Industry

By Antonio Gozain | Wed, 03/23/2022 - 11:03

While the automotive industry undergoes one of its largest transformations in history, mobility as a service (MaaS) is set to crystallize the evolution of vehicles and mobility solutions from a product to a service, said Sampo Hietanen, Founder and CEO, MaaS Global and Whim.

MaaS is a concept that encompasses all transportation options, public and private, under a single scheme that simplifies movement from one point to another. MaaS relies on a digital platform that integrates end-to-end trip planning, booking, electronic ticketing and payment services across all modes of transportation, according to Deloitte.

Since 2016, MaaS is a reality for Helsinki residents who can use the Whim app to plan and pay for all modes of public and private transportation within the city, whether by train, taxi, bus, carshare or bikeshare. “[If you give up on your car,] I promise to get you anywhere you want, anytime,” said Hietanen. Users in the EU can pre-pay the service as a monthly mobility subscription similar to Netflix’s, choosing the package that best fits their mobility needs, he explained.

The market of MaaS will see exponential growth in the near future, said Hietanen. In the EU, people spend around 20 percent of their household income on mobility and the average monthly cost of owning a car is €616 (US$678), according to Whim. Private car share makes up 76 percent of all transportation costs, whereas private cars are in use during 4 percent of their life cycle, said Hietanen. Regarding sustainability, in the EU, 40 percent of carbon emissions are generated by traffic, according to strategic consulting firm Frost & Sullivan. Moreover, 38 percent of car owners would give up their vehicle if they could, taking 70 million cars off EU roads, according to the firm.

Whim is currently available in the cities of Vienna, Antwerp, Helsinki, Turku, Tokyo and Birmingham, and nationwide across Switzerland. “We want to make mobility smoother, everyday life easier and our cities greener,” said the company. Although Mexican culture has historically favored traditional car ownership, “younger generations would like to get rid of vehicles,” said Hietanen, who added that 24 percent of Whim users said that the app helped them to get rid of their own cars. In addition, 62 percent of Whim’s total userbase use it for all their travel needs.

While all the necessary components for the implementation of MaaS are already available, there are several challenges to overcome, said Hietanen. The first step to achieve this interconnected world is to combine cars, car rentals, bikes, trains and subways in a simple, one-stop-shop, said Hietanen. “The tricky part is that the whole industry has a logic of doing everything on their own. Nobody has enough capacity alone. We need to form a competitive ecosystem.” Collaboration between industry players, cities and governments is crucial, with a customer-centric approach, no exclusive deals, local transportation on board and open ecosystems, said Hietanen.

Whim’s business model is based on fixed subscription pricing open to add-ons, said Hietanen. Whim pays for transport consumption in subscriptions and makes money from under-use, while offering the shift to more sustainable and less expensive modes, such as bikes, which are highly accepted by the public, he added. “Every time I take you on sustainable means of transportation, I lower the production cost and increase the revenue.”

The future of the automotive industry is MaaS, said Hietanen, and called on all actors from the sector to get involved. “This is a change that no one can take alone.”

Antonio Gozain Antonio Gozain Journalist and Industry Analyst