From Car Owning to Ride-Sharing: How MaaS Could Change the Way We Travel

Of all the potential initiatives currently being discussed to reach sustainability targets, tackling the number of privately-owned cars currently clogging the streets of Europe’s cities remains one of the most straightforward. This will mean a new mobility ecosystem, part of a larger, interconnected, urban vision. Mobility as a Service (MaaS) is integral to this vision because it aligns both existing and future modes of transport in one cohesive strategy.

MaaS is a new mobility business model, relying on a digital platform that integrates various forms of transport services into a single on-demand service. Such a service would mark the shift from privately-owned vehicles, from the idea of owning a means of transport. Instead, transport would be consumed, as needed, as a service. Ideally, this would lead to fewer cars on the road, meaning less congestion and with a much a smaller demand for parking, freeing up space in cities for pedestrians and cyclists. There is, however, also a risk that robo-taxis (self-driving cars) will overrun our streets in the near future, leading to even greater traffic problems.

Owning, maintaining or even simply driving a car has already become almost prohibitively expensive and inconvenient in big cities., especially for younger generations. Meanwhile, older generations are also realising that their cars are stationary, parked for more than 90% of the time[1]. This begs the question of whether or not owning a car is even worth the hassle and expense. Particularly now that there are many companies offering cheap and straightforward car rental on-demand services, called car-sharing. With so many urban households only using their cars a few times a year, the costs of maintaining the vehicle, per trip, shoot up. There are huge financial savings to be made in switching from being a car owner to a shared car renter/user, sharing the costs with fellow users. Shared costs also make newer (and more expensive) technologies more accessible – electric and/or autonomous vehicles would no longer be too expensive to implement. Improved access and greater implementation can only spur the development of these emerging sustainable technologies.

The variety of existing car-sharing business models can cover all mobility needs of users now covered with private cars, both in terms of trip purpose and trip distance and by offering the possibility of choosing different kinds of vehicles. Automation could be the turning point technology for many private vehicle owners to stop owning vehicles and instead, start using shared vehicles.

But even in a market with a high rate of MaaS uptake, owning a private car could still remain a popular choice, particularly in underserved areas such as urban suburbs and rural areas. However, with expensive autonomous vehicles coming into the game, fewer people will be able to afford to have private ones. For this reason, many people giving up their own old private cars will probably switch to shared autonomous mobility services.

But it will not happen overnight, a long transition period is expected before reaching full autonomy. During this transition period, different levels of autonomy will enable different use cases and vehicle types. Automation levels 3 and 4 will not be truly disruptive and we will still recognise mobility by car (shared or private) as very similar to what it is today. But, once automation Level 5 comes into play, the real disruption will happen.

As the business model of ride-hailing is today disrupting the more traditional taxi model and car-sharing doing the equivalent to traditional car rental, the final stage of automation development will converge into the robotaxi model, where shared autonomous cars will autonomously pick-up and drop passengers on-demand without the need of drivers. This is expected to start happening in most innovative cities from 2030.

[1] As calculated by the International Transport Forum in their report Shared Mobility – Innovation For Livable Cities.

Albert Serra is a consultant, Laszlo Bax the founder and a senior partner at Bax & Company. Bax & Company is a sustainable innovation consultancy, with a strong track record working with Europe’s leading car makers on organising their R&D towards providing truly sustainable mobility.