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MaaS transit: The business of mobility as a service
In 2019, St. Louis Metro Transit was struggling to keep customers. Uber and Lyft, along with dockless shared bikes and scooters, had flooded streets, causing ridership to fall more than 7% in a single year.
The agency didn’t try to fight for attention. Instead, it embraced its competitors.
Metro Transit dropped its internal trip-planning app, which had been developed with the Trapeze Group and directed riders to Transit, a private third-party app that offers mapping and real-time transit data in more than 200 cities. That app also included micromobility and ride-hailing information, allowing customers to not just look up bus schedules, but see how they might get to and from stops — or ignore the bus altogether.
The following year, Metro Transit partnered with mobile ticketing company Masabi and added a payment option on some bus routes. Now, the agency is planning an all-in-one app — via third-party providers Transit and Masabi — where customers could plan and book end-to-end trips across trains, buses, bikes, scooters and taxis.
“What we do best is transporting large volumes of people on vehicles and managing mass transit,” said Metro Transit executive director Jessica Mefford-Miller. “On the software side, there are a lot of players out there doing great stuff that can help us meet our customers where they are and make trip planning as easy as possible.”
St. Louis Metro Transit isn’t an outlier. As transit agencies seek to win back riders, a flurry of platforms — some backed by giants like Uber, Intel and BMW — are offering new technology partnerships. Whether it’s bundling bookings, payments or just trip planning, startups are selling these mobility-as-a-service (MaaS) offerings as a lifeline to make transit agencies the backbone of urban mobility.
Whether it’s bundling bookings, payments or just trip planning, startups are selling mobility-as-a-service (MaaS) offerings as a lifeline to make transit agencies the backbone of urban mobility.
Third-party platforms have become more appealing to transit agencies as they scramble to keep buses, trains and rail full of customers. According to the American Public Transportation Association (APTA), ridership and total miles traveled has declined since 2014, including a 2.5% drop from 2017 to 2018. The COVID-19 pandemic could accelerate this trend as more people continue working from home or shy away from crowding into buses and trains.
“This is like Expedia, the idea of seeing multiple airlines in one place to comparison shop,” said Regina Clewlow, CEO of transportation management firm Populus. “A lot of operators are looking at the question of whether that would give them more rides.”
But that the private growth could come at a cost, potentially injecting private concerns into what should be a public good, Metro Transit’s Mefford-Miller cautioned.
“If we let the market handle this planning on its own, a company might only do it for someone with a digital device or a bank account or only help people who don’t need special accommodation,” Mefford-Miller said. “That’s why we have as an underpinning an equitable and accessible system. It’s the underpinning before we choose any tools we use.”
The players
Amid the swarm of new startups there are a few giants. One of the biggest established players is Cubic Corp., a San Diego-based defense and public transportation company. The firm already controls payments and back-end software for hundreds of transit agencies, including in Chicago, New York and San Francisco, and in January launched a suite of new products under the brand name Umo to expand their offerings.
The package includes a customer-facing multimodal app, a fare collection platform, a contactless payment system, a rewards program, a behind-the-scenes management platform and a MaaS marketplace for public and private offerings. Mick Spiers, general manager of Umo, said the goal is to offer a “connected, integrated journey.”
“We’re uniquely placed as an independent, trusted third party that can be the data broker for a journey focused around the needs of the user,” Spiers added. “The journey we create has no commercial interest for us.”
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Used car marketplace Carsome gets $30 million Series D for its Southeast Asia growth plans
Carsome, which bills itself as Southeast Asia’s largest e-commerce platform for used cars, announced it has closed a $30 million Series D. The funding was led by Asia Partners, with participation from returning investors Burda Principal Investments and Ondine Capital.
The startup described this as one of the largest “all-equity financings to date in Southeast Asia’s online automotive industry.” Part of the Series D may be used for mergers and acquisitions to consolidate the company’s supply chain.
Founded five years ago in Malaysia, Carsome’s platform serves both C2C and B2C segments, and ensures quality by conducting inspections before vehicles are listed on its platform. It now has 1,000 employees and claims to transact 70,000 cars on an annualized basis, totaling $600 million.
In a press statement, co-founder and group chief executive officer Eric Cheng said that the company, which now also operates in Indonesia, Thailand and Singapore, doubled its monthly revenue over the past six months, compared to pre-pandemic levels. The company says that this is partly because more people and businesses are buying their own cars for safety reasons.
While sales of new vehicles have plummeted around the world, used car sales, especially through e-commerce platforms, are recovering more quickly, according to Counterpoint Research. This largely because people want to avoid public transportation and ride-hailing, but also want cheaper options.
Other used car platforms in Southeast Asia include Carro, OLX Autos (formerly called BeliMobilGue) and Carmudi.
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Uber, Lyft and the challenge of transportation startup profits
How much does transportation cost you?
In most cities, bus or subway fare might set you back $3 or so. A tank of gas, maybe $30 or $40 depending on your car. An hour of street parking? Sometimes it’s free, sometimes it’s a few bucks. And you can usually snag an economy seat on a round-trip U.S. domestic flight for less than $300.
These numbers probably ring true for most people. There’s just one problem: Everything you know about the cost of transportation is wrong.
Despite a massive infusion of venture capital into the transportation sector over the past few years, mobility startups are starting to learn what every transportation business has known for generations: transportation profits are elusive, and the system is mainly held together by subsidies. Will this be the first generation of transportation businesses to escape history?
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Whim, the all-in-one mobility app for ridesharing, public transit and rentals is coming to the US
MaaS Global, the company behind the all-in-one mobility app Whim, which offers a subscription service for public transportation, ridesharing, bike rentals, scooter rentals, taxis or car rentals, will be making its U.S. debut later this year.
The company will choose its American launch city from Austin, Boston, Chicago, Dallas and Miami, according to Sampo Hietanen, the company’s chief executive.
The Whim app is currently available in Antwerp, Birmingham, U.K., Helsinki and Vienna, according to Hietanen, and offers a range of subscription options. The top of the line version is a €500 per month all-inclusive package giving users unlimited access to ride hailing, bike and car rentals and public transportation.
“Cars take 70 percent of the market and it’s used 4 percent of the time so you’re paying for the optional capacity,” says Hietanen. Using Whim, which, at the high end costs about as much as a car in Europe, users can get all of the optionality without paying for the unused capacity. It should ideally reduce transportation costs and cut down on emissions, if Hietanen’s claims are accurate.
The Helsinki-based company uses APIs to connect with the back end of a number of service providers. For car rentals, it’s working with businesses like Hertz, Enterprise and EuropeCar; for ridesharing, the company has linked with Gett and local European taxi companies, according to Hietanen.
Users have already booked 3 million trips through the company’s app since its launch and the company is continuing to expand not just in North America, but in Asia as well. There are plans in the works for the company to launch operations in Singapore.
Giving consumers more options for transit through a single gateway could reduce demand for vehicles, but some analysts argue that it won’t do much to alleviate congestion on roads. Consumers, they argue, will choose the convenience of rideshare over mass transit and could actually increase.
As Richard Rowson, a mobility consultant from the U.K., noted in this post:
MaaS doesn’t implicitly mean a net decrease nor increase in the number of road vehicle miles. The changes are complex, but in balance look likely to result in an increase.
Factors such as migration from private car to public transport should cause a reduction, but migration from train and bus, to private hire and smaller demand responsive buses will cause an increase. Other factors such as ‘positioning’ movements as ‘on demand’ vehicles are positioned to exploit demand also create journeys.
Smart journey planning and navigation systems should make better use of available road capacity, such as identifying alternative routes – but at the expense of migrating through traffic to local access roads.
There is the potential that having a single point of access to mobility may actually help cities push riders to favor public transportation by offering a window into the amount of time using each service would take and showing users the fastest route.
Last August the company said it had raised a €9 million round from undisclosed investors. It had previously received capital from Toyota Financial Services and its insurance partner Aioi Nissay Dowa Insurance.
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