" class="no-js "lang="en-US"> EXCLUSIVE: "Moving On" - Alex King in 'The Fintech Magazine'
Sunday, February 05, 2023
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EXCLUSIVE: “Moving On” – Alex King in ‘The Fintech Magazine’

Alex King explores how mobility as a service could be morphing into a broader embedded concept

Back in 2007, the revamped Eurostar line between London and Paris was unveiled. The £6 billion project, which included the revival of London’s St Pancreas terminus, would shave 40 minutes off the journey time between the European capitals. This was money well spent, according to the organising stakeholders, who anticipated a 25 per cent increase in traveller numbers before the end of the decade. But when that boost failed to materialise, the project’s value for money was called into question.

As behavioural economist Rory Sutherland has noted, for a tenth of the project’s budget, Eurostar could have hired all the world’s top male and female supermodels to patrol the train handing out free Château Pétrus, and people would have demanded the trains be slowed down. Here, Sutherland hits on the key issue that has always plagued the mobility sector. People don’t choose their mode of transport based soley on each journey’s cost and duration, but on a litany of factors which, in today’s world, include COVID security, relative emissions, and even how the journey makes them feel.

That’s a truth well understood by MaaS Global, a developer of mobility software that launched its app, Whim, in 2016. The Whim app connects users with every option in a city transportation network – including trains, trams, buses, taxis, bikes and e-scooters – via a pay-as-you-go model or a monthly subscription. The stated aim of the app is to ‘create a world where you don’t have to own a car to live a fulfilling life’, in recognition that easy, omniplatform access to the full spectrum of a city’s mobility options is enough to nudge users away from their private vehicles.

It’s little wonder that the concept of ‘mobility-as-a-service’ (MaaS) was forged in Finland, where there are an estimated nine cars in use for every 10 people. The EU average is closer to five cars per 10 people. Whether informed by Helsinki’s traffic hell or not, Whim has ambitions to take a million cars off the roads by 2030, finding in a 2021 poll that 12.5 per cent of its Finnish users had already got rid of their car, or avoided purchasing one, thanks to the app.

Whim launched in Birmingham in 2018, and has since expanded to several other European cities. It’s also present in Japan and Singapore, being hailed as ‘the Netflix of public transport’ by Singapore’s press on the eve of its launch in the city-state. Like Netflix, Whim’s service is all about providing choice, on demand. And like streaming services, Whim relies on tech partners to make its offering as attractive and practical as possible, including when it comes to ease of payment. In 2020, Whim set its sights on issuing a card that could be used alongside its app.

“81 per cent of those surveyed believe they will prefer to use a single app or platform for ordering and billing all their mobility-related services. By 2030, every journey will be a personalised experience”

BearingPoint’s Destination 30 report

The MaaS pioneer found a natural partner in Enfuce, the Helsinki-based card-as-a-service (CaaS) fintech, also founded in 2016. Both firms are confident that friction-free services, offered with friction-free payments, could be the incentive consumers need to finally drop their private vehicles. Underpinning the entire MaaS movement is the understanding that a true shift in our mobility habits will only take place when public transport becomes a genuine alternative to cars – not just in terms of price and journey duration, but in terms of simplicity, ease, and reliability. No one understands this better than David Hensher, founding director of the Institute of Transport and Logistics Studies at the University of Sydney and a pioneering MaaS scholar.

“MaaS will only have a future if it changes the travel behaviour of a sufficient number of people,” he told Mobility Payments. Having worked closely with MaaS Global, monitoring the adoption of the Whim app in different jurisdictions, he believes MaaS approaches should now shift onto a new track to appeal to more people.

At the moment, we are not seeing anywhere in the world at all that [MaaS] products are getting people out of their cars in any significant way,” he said.

Sampo Hietanen, founder and CEO at MaaS Global, recently charted the evolution in his thinking in a LinkedIn post.

“We tend to be a bit arrogant in this industry, thinking that things will integrate to us. It just might be that it works better if mobility is embedded into all other services. “If you think of mobility from the perspective of the user, it is there to support the real things of value. Those things are at the destinations. So it’s obvious to make mobility a part of every offering out there.”

What he’s getting at is the need for services like Whim to not just be a Pandora’s box of travel options, but to wrap themselves around experiences – such as going on a city break, or travelling to a wedding – in such a way as to make those experiences more satisfying. This ‘second generation’ MaaS approach was recently explored in a report from consultancy firm BearingPoint. Hearteningly for Hietanen and Whim, their Destination 2030 study found that 81 per cent of those surveyed believe they will prefer to use a single app or platform for ordering and billing all their mobility-related services by 2030. Echoing Hietanen’s thoughts, the report’s headline prediction is that, by 2030, every journey will be a personalised experience.

“The time people spend travelling will increasingly be used as productive time for other activities that can be accessed online – shopping, entertainment, household administration – enabling multiple service providers from different sectors to earn revenues.”

Notice that these are activities one cannot perform when behind the wheel of a car. So, the MaaS market is in a state of flux about the future. On the one hand, two ‘black swan’ events have arrived like London buses this decade: the COVID pandemic and the ongoing energy crisis created by the war in Ukraine. They’ve upended the market. On the other hand, MaaS is a fledgling, active research area. Despite early successes, it is still finding its feet, its business model, and its customers. Only in July 2022, a study by BIS Research estimated that the MaaS market would generate $379.66billion in revenue by 2031, at a CAGR of 25.7 per cent. That’s nearly a tenfold increase from the $39.23billion in revenue the market generated in 2021.

These projections take into account increased urbanisation, soaring costs, environmental concerns, and planned infrastructure projects. The Destination 2030 report offers a glimpse of the facilitators that will take us from these global mega trends to global habit changes. It acknowledges that policy and legislation will play a part, for instance in the phasing out of domestic flights. It hints at new insurance models and novel integrated payments services, and proposes a role for energy companies and the automotive industry, too. All this is to say that there are many moving pieces, but they appear destined to come together. MaaS Global, meanwhile, is not waiting on the platform, staring longingly down the tracks.

Whim, and its founder, are busy building the platform, scaling up the ticket office, and exploring partnerships that touch on that sentiment from Rory Sutherland: that we’re irrational creatures and that we make decisions based as much on our feelings as on the facts. Eurostar would eventually meet its traveller number aspirations in 2019, hosting 11 million passengers between London and Paris. In a cruel blow, the following year would see a 95 per cent reduction in traffic due to pandemic travel restrictions.

The service remains far from a full recovery, with its future hanging in the balance. Yet Eurostar, alongside Europe’s Interrail ticket, is symbolic of successful collaboration across borders, systems, and services, making mobility simpler for European travellers. A mammoth undertaking with a lofty ambition, it too shrugged off the naysayers to prove that, in mobility, what really counts is the connection. What Eurostar achieved on the continental scale is now taking place on the metropolitan one, with trailblazers like Whim positioned to drive this growth market.

All trends point to a future in which MaaS conquers global transport, spreading between cities, then countries, then continents. It’s a future in which every door-to-door journey can be planned and purchased through a single app. In this future, you’d expect, Eurostar will cement its role as a simple, seamless and sustainable way to journey between the British Isles and the European continent.


This article was published in The Fintech Magazine Issue 26, Page 13-14

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