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Wednesday, September 14, 2016

Mobility as a Service Revenues will Reach $1 Trillion

Urban transportation is undergoing a revolution that's being driven by a variety of technologies. They've enabled new and disruptive business models. Recent research findings now indicate more changes are coming.

Where there's big change, there's often big opportunities. The emerging category of Mobility as a Service (MaaS), which provides aggregated, single account, on-demand multi-modal transportation services, is quickly gaining momentum.

According to the latest market study by ABI Research, global MaaS revenues will exceed $1 trillion by 2030. The anticipated impact on traditional transportation modes -- such as car ownership, buses, trains, taxis, and rental cars -- is causing a reevaluation of the economic foundation for legacy transportation companies.

Everything as a Service Market Development

"Driverless technology, through the Car as a Service (CaaS) paradigm, will be the defining factor for the success of on-demand mobility, offering consumers the possibility to summon transportation on the fly," said Dominique Bonte, vice president at ABI Research.

ABI analysts believe that MaaS concepts will result in more transportation offerings through the deployment of fleet-based, alternative energy-efficient powertrain vehicles and reduced congestion through improved utilization rates of available resources.

Autonomous vehicle operation will eliminate the need for paid drivers, reduce insurance costs, increase utilization rates to more than 70 percent, and enable Over the Air-based self-servicing and preventive maintenance.

When combined, this development will drive down the total variable cost-per-mile to a level that undercuts the cost of car ownership and enable MaaS ecosystem development. Vehicle-to-Grid, demand-response charging of electric powertrains and the economies of scale from fleet deployments will further lower costs.

The MaaS ecosystem will create dynamic transportation marketplaces, public private partnerships, plus aggregators managing the supply and demand according to government policies and associated frameworks.

Private and Public Transit Market Outlook

While the multi-modal character and complex interdependence of different transportation models is at the heart of MaaS, personal CaaS models will remain the dominant contributor to on-demand mobility though 2030.

Bicycle rental revenues will remain small. Moreover, Transit as a Service -- i.e. on-demand bus and driverless shuttle -- business models will likely start to become a significant market segment by about 2025.

But rail-based and other fixed route and fixed schedule public transit will become part of the MaaS paradigm, with digital technology and open platforms allowing automated multi-modal routing and single account billing.

"MaaS will fuel economic growth through lower transportation pricing," concludes Mr. Bonte. "But it will have to overcome resistance from both private and public entrenched players before it begins to progress."