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1. Mobility as a service
1.1 Mobility as a service introduction
Thanks to new technologies and new models that have been introduced in the last decades, it
is possible to talk about a new definition and paradigm in the transport sector, which is called
mobility as a service. This term, usually abbreviated with MaaS, refers to an innovative concept
that has the goal to revolutionize the way of moving inside and outside the cities, integrating
public and private sector in the transportation industry and merging with the new paradigm of
sharing economy. As for all innovations, it is difficult at the beginning to define clearly how
mobility as a service must be intended and what are its main characteristics.
Hietanen (2014) refers to it as a concept that combines different transport modes that offer a
tailored mobility package to the customer, usually with a monthly fee, in the same way as we
are familiar with the monthly phone contract. In this way, it is possible to offer to the customer
also other complementary services, such as payments, itinerary plans and reservations. As
Jittrapirom et al. (2017) considered in their systematic literature review about the topic, this
new mode of transportation shifts away from the ownership-based transport system towards an
access based one.
This concept is the revolutionary future that mobility as a service intrinsically brings within
itself: during the last few years, this reality is becoming more concrete, thanks to the new
technologies of this century, such as internet and communication technologies, and thanks to
the new paradigms and business models created by the sharing economy. About this last
concept, it is necessary to spend a few words in order to better understand the dynamics that
are bringing the shifts from ownership to service also into the transportation sector.
First, the sharing economy model started to spread worldwide after the crisis in 2008. During
those years, two main factors have contributed to a new demand: the needs of people to have
access to lower cost services and the increasing awareness about the importance of
sustainability and pollution (Cohen and Kietzmann, 2014). The most important companies that
were able to anticipate those needs and exploit the scale economies with this new business
model are Airbnb and Uber.
Uber, the famous company that has revolutionized the transport system, was able to convert
jobs into tasks and offer a highly customized experience, by renting workforce for specific
tasks. It has also led to a new term, the “Uberization”, popularized by Maurice Lévy in a
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Financial Times interview in 2014
1
. This term refers to the situation in which a traditional
sector, such the taxi service, was suddenly compromised by a new company that exploits the
new technologies. Lévy called it “Digital Tsunami” because, in a very short period, has
drastically changed an entire sector. This happened so fast since the new service could offer
more features at a lower price. In the case of Uber, for example, the company has been able to
offer the service almost in real time through the mobile application, and at a competitive price
by reducing both resources and a percentage of costly infrastructure such as offices and support
services (Bertrand et. al, 2016). The linkage between the mobility as a service concept and the
sharing economy principles is the digitalization factor.
In fact, services like Uber and Airbnb, work through a digital platform that links the customer
demand with the supply, in a customized and efficient way. Coming back to the MaaS, it is
possible to better understand this concept as a unique platform that merges both private
companies, such as Uber, with public transportation. This unique platform, that can be also
used as a mobile application, is able to let the customer to move inside or outside the city,
combining private and public transports. It is possible to give a simpler definition with the
words of Finger et al. (2015) that envisioned MaaS as an integrate transport modes through the
internet. The possibility to have all these services in one platform emphasizes the differences
between Uber and MaaS. Clearly, this integration is very difficult, since it is necessary to have
a concrete and stable collaboration between private and the public transportation, considering
that they should act in a completely integrated environment (Flood, 2015).
1.2 Business models in sharing mobility
To create a complete and more complex environment, it is necessary to consider in this system
also the sharing mobility services, like car-sharing, ridesharing or bike-sharing. While the
business model of Uber, for example, is based on the lack of the company’s ownership of the
items that are used for running the business (such as cars or motorbikes), in the sector of sharing
mobility the most common and famous approach uses an opposite business model, based on
the acquisition of vehicles from the company. Cohen and Kietzmann (2014) identified three
different business model related to car sharing, six related to ride sharing, and five related to
bike sharing.
1
https://www.ft.com/content/377f7054-81ef-11e4-b9d0-00144feabdc0
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Regarding the car sharing, the most common business model is the Business-to-Consumer
(B2C), which is a private ownership model that consists in the supply of cars for consumers
and has the aim to increase the sustainable mobility, but also to maximize profits. In this case,
the cars are positioned around the city and, through keyless technology using a mobile
application of geo-localization, it is possible for the customers to have access to the cars using
their credit card. There are usually two different categories to exploit this service: the first one
is the roundtrip model that requires to return the car to the same location where it was picked
up. This is the case, for example, of the business model of Zipcar. The other model is the point-
to-point one, also known as one-way. It is the case of the famous company Car2go that allows
the customers to leave the vehicle parked on the street wherever he has to go. In this kind of
business model, it is possible to start to see a beginning of collaboration between private
companies and cities. In fact, usually included with this kind of service, there is the possibility
to have a free preferential park access, or a discounted one, and the access to the reserved high
occupancy vehicle lanes and other toll benefits.
There are other two business models related to car sharing, one is the Nonprofit or Cooperative
Carsharing and the other is the P2P carsharing. The first one is made possible by a community
of people that choose to share their resources for carsharing operations. The goal here is mostly
related to increase sustainability and lowering the number of cars on the road, rather than
having a profit. The most famous cooperative carsharing platform is Modo
2
. Moreover, this
model relies on a highly intensive use of capital for buying cars. The last model, the P2P one,
is the most recent and innovative. It consists in a platform that links private users and, by doing
so, the capital invested by the company for the ownership of the cars is negligible, and the users
that have underutilized cars can gain profits by renting it to other users. This could happen, for
example, when a user travels abroad and allows other private users to use his own car for that
period. In this scenario, the most famous company is Turo
3
. This company has created a global
platform that has become a unicorn in 2019, after a valuation of 1 billion dollars due to a series
E round of $250 million
4
. It is an important innovation in the mobility sector, since it helps the
shifts from ownership to service for the cars also between private individuals.
2
https://modo.coop
3
https://turo.com
4
https://techcrunch.com/2019/07/17/peer-to-peer-car-sharing-marketplace-turo-raises-250m-at-over-1b-
valuation-from-iac
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Cohen and Kietzmann (2014) have noticed how the relationship between the service providers
(agents) and the local governments (principals), are important to achieve the common objective
of a sustainable mobility. In figure 1.1, they show, through the shared mobility agency matrix,
how the integration between shared mobility operators and cities has the potential to minimize
agency conflicts and increase the sustainability of the business models.
Figure 1.1 Shared Mobility Agency Matrix. Source: Cohen and Kietzmann (2014)
On the y axis it is located the level of interest of the agent on the service. In this case, the goal
of a private service provider is to maximize the value for every paying customer. On the x axis
it is represented the interest of the principal, which is to create a better environment for the
citizens and to reduce pollution. On the graph it is possible to see that the best solution (when
the value for the customers is the highest and, at the same time, the transport system in the city
is optimized) is achieved with the Merit business model for sustainability (BMfS). The research
by Cohen and Kietzmann (2014) refers to Merit as a hybrid for-profit model with tangible
government support. In fact, to allow individuals with low income level to have access to
transportation, many transport systems are subsidized by the government.
The research analyzes also the business model of bike-sharing and ridesharing. Ridesharing
consists of carpooling, flexible carpooling, vanpooling, and P2P ridesharing (Chan and
Shaheen, 2012). Also in this case, the carpooling can be done for profit or non-profit purposes:
P2P carpooling, thanks to the power of social networks and new technologies such as mobile
geolocation, enables real-time ridesharing among network members (Kietzmann et al., 2011).
The flexible carpooling involves the use of designated meeting places, instead of prearranged
door-to-door services. The P2P rideshare companies have primarily avoided collaborations
with cities and public transports agents; for this reason, even if they are able to offer a disruptive
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service that minimize the costs for the customers, they failed to expand their business longevity.
This is another demonstration of the importance of the collaboration between public and private
sectors.
Regarding to the bike-sharing business model, since the costs of bikes is more affordable than
cars, it is possible to have a publicly owned bike-sharing model. In this case, the cities
themselves decided to fully fund and take responsibility for the operation of local bike-sharing
programs. This model has the advantage to be perfectly integrated in the public system. This
is, for example, the case of BikeMi in the city of Milan, where, with only the ATM membership
for public transportation, it is also possible to use the related bike-sharing service
5
. Another
interesting business model for this service is the sponsorship-based bike-sharing. It consists in
an advertised service provided by a private company to increase their image and brand
reputation. It is the case of Barclay’s Bank, which became the title sponsor of a bike-sharing
system in London (Cohen and Kietzmann, 2014). The core of this research is related to the fact
that, to exploit positive externalities and to create a real value for the customers, it is necessary
a Merit-based business model by the government through subsidies and incentives. In this case,
the transport system will be able, at the same, time to guarantee the optimization of the cities
in terms of pollution, traffic congestion and, more in general, on sustainability. This fact will
also provide a more advantageous integration for customers and a minimization of agency
conflicts.
1.2.1 Type of schemes for mobility as a service
Even if in most cities and states the concept of mobility as a service is not considered yet, there
are some examples of schemes that exist today and will set the future for an integrated mobility
for other cities and countries. Jittrapirom et al. (2017) have identified three different type of
schemes that are adopted for MaaS. After having analyzed the schemes adopted in Europe and
USA, they have concluded that, in each of these schemes, public transportation is almost
always included as a part of a system of multiple transport modes offered. Carsharing, bike-
sharing and taxis are always included, while it is more difficult to have a rental car or peer to
peer car sharing service offered in these schemes. The opportunity to park in reserved area and
use regional transport seems are used in half of the models. Furthermore, in almost half of the
cases, it is offered a pay-per-use tariff option. All these systems work thanks to a mobile app,
5
https://www.atm.it/it/ViaggiaConNoi/Bici/Pagine/BikeMi.aspx
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and two of the schemes analyzed by the study offer also a web platform. Another type of
mobility as a service scheme is the use of the app as a digital wallet, also called e-wallet. In
this case the consumer can refill its e-wallet and use the credit to buy tickets and to pay parking.
It is, for example, the case of My Cicero, an Italian company based in Rome, that allows the
users to book tickets of public transports directly by the application
6
. The app also gives real
time information and has access on municipality services. It is possible to see it as an evolution
of the public transportation, but it is not completely integrated with private systems, such as
car sharing or taxi.
Some examples of interesting options, that seem to reproduce in a better way the concept of
mobility as a service, use a monthly tariff option. In this case, it is possible to pay a monthly
membership fee and have almost unlimited access to a lot of transport services. The Whim
model sets a good example of this service: it was lunched as a pilot project in Finland in 2016
and is still active
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. This service includes three different monthly packages and a pay per use
option. Maybe, one of the reasons of its success is in this type of options offered to customers.
In fact, most of the other services, analyzed in the study by Jittrapirom et al. (2017), use only
pay per use or only a monthly tariff system. Whim, instead, offers 4 different plans that are
accessible through their website, one pay per use and other three plans are offered with a
monthly subscription: this allows a good level of customization that can respond to different
needs of the customers. To make these options clearer, we will now describe them:
• Whim to go plan is a pay-per-use option that includes City bikes, e-scooters, taxis, HSL
tickets and rental cars on demand without subscription. In 2020, they have included a
city-bike season plan for the cost of 24,90€.
• Whim Urban 30 is the cheapest one: it costs 59,70€ per month and includes Helsinki
Regional Transport (HSL) tickets, City bike, 4 x €10 taxis and access to book and pay
TIER e-scooters.
• Whim weekend is the second option: it further includes a week-end rental car service
and discounted taxis, all of this at the cost of 249,00€ per month. It is a plan tailored for
those customers who work during the week and use the car on the weekend for leisure.
• Whim Unlimited is the most complete and expensive plan. As the name of the option
suggests, in this case the access to car, taxi, public transport, TIER e-scooter and city-
6
https://www.mycicero.it/
7
https://whimapp.com/
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bike is unlimited at a price of 499,00€ per month. It is a very expensive plan, but is a
good starting point, because it represents at best what is the mobility as a service
potential. In the future, thanks to innovations in technology and competition, this price
can be reduced and become more accessible.
1.3 Complete scenario of MaaS
After having analyzed the different models of transportation and having understood the actual
services that companies and cities have to offer to the citizens, it is possible to have a complete
panorama about what mobility as a service has to offer. In the figure n. 1.2, it is possible to
notice all the services that could create a perfect scenario for MaaS and understand all the
benefits for the users (Fishman, 2012). It is possible to notice that the real power of the mobility
as a service paradigm is the integration of synergies that is created by all the modes of
transportation that the users can choose. Fishman (2012) represents with this picture the future
scenario; in fact, it is possible to see also the icons of autonomous vehicles, connected vehicles
and real-time traffic management.
Figure 1.2 Future mobility options. Source: Fishman (2012)
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In the next paragraph, it will be better analyzed the future scenario that could become a reality,
thanks to the use of new technologies, such as artificial intelligence, and how the new
technologies could add an enormous value for the integrated smart mobility. Those
technologies are not yet used, even if there are some examples of pioneering countries that are
starting to adopt them. For example, in Switzerland, the company PostBus launched the
autonomous vehicle Sion Smart Shuttle pilot project for almost 1 year, from 2016 to 2017
(Eden et al., 2017). The future of transport will necessarily include new technologies, such as
autonomous vehicles, big data analytics, internet of things, 5G and other disruptive
technologies concerning customer services in the digital age (Transport for NSW, 2016).
Moreover, the digital context, in which the society lives, includes smartphone apps that allow
fast and easy access to bookable services, including driverless vehicles of all types, such as
cars, taxis, buses and trains. This scenario will lead to a mobility as a service system in which
the need for individuals to own a car will be reduced drastically.
Most of the literature analyzed by David A. Hensher seems to confirm this idea of the changing
role of ownership, with cars available to be booked for a point-to-point trip, with or without a
driver in the future as autonomous vehicles will arise (Hensher, 2017). Another theory is that
Maas opens new opportunities for better customer services and potential reductions in public
subsidy for public transportation services, many of which are currently inefficient in terms of
cost and network effectiveness. In other words, Hensher (2017) highlights the fact that the
capability of MaaS to better respond to the consumers demands could lead to a decrease of the
public provision of bus services, since they will be less able to match the needs of the users.
Anyway, it is not possible yet to have evidences and proofs for this future scenario.
1.3.1 Influence on customers behaviors
The shift from ownership to service will completely change also the role, responsibilities and
power of transportation: the sector will be more able to influence the consumers’ behaviors and
choices about the way to move. For example, the users could be incentivized by loyalty
programs, fare discounts for multi-riding, discounts on products from various stores (Hensher,
2017). The role of MaaS on sustainability and carbon emissions will become more and more
important.
In a study conducted by Sochor, Strömberg and Karlsson on the operational test of UbiGo, a
Sweden pilot project conducted in 2014, the changes in travel behaviors, users’ mode choices
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