Sampo’s blog: To Happen, Change Must Be Desirable

By MaaS Global • January 3, 2019

By Sampo Hietanen, CEO and Founder of MaaS Global

During my life as a traffic engineer, and then an NGO leader and an entrepreneur in the mobility sphere, I have seen plenty of services built around a wish. Sometimes the wish is that people would use more public transportation or make other environmentally sound choices, sometimes the wish is to protect the local or domestic status quo. While there are lots of things I’d wish too, I would never build a business or support a policy built around a wish.

This includes putting the consumer at the center as an object instead of a subject. When that happens to a service, it becomes a tool to steal the decision making power from its customers. This is often the case with municipally-run outfits, or public or private monopolies. The worst, I guess, is when politicians governing a municipally-run operation see it as a channel to force their ideologies upon people. Some might call it democracy; I call it alienating people from the service.

“Yes, but we can educate the user and help them see our point,” some might say. Sorry, you can’t. You may reach a few enthusiasts, but for the majority of people it does not work. People did not quit smoking when they learned about their habit’s health effects; they quit when it was no longer socially desirable.

For anything to have an impact in the marketplace, it has to be attractive. At MaaS we sincerely believe our service benefits the society to the extent of being revolutionary, but when we build it, we focus on one thing: serving the needs of the customer. How do they want to move around? What do they think is fair?

Our understanding of our current and potential customers has led us to believe in three fundamentals.  First: One must be able to get all transportation from one source. Second: One must be able to change that source, i.e. the operator, when one wants. Third: The system must allow roaming, on the national and the international level.

If these three things are achieved, and the user interface is fantastic, then we can start looking at the impact, maybe even tweak it somewhat. But only then.

Currently, the biggest barrier to selling MaaS-type services worldwide, in our case our Whim service, is on the supply side. Our day-to-day battle is to ensure sufficient supply through access to different transportation services, using reasonable technology and on reasonable terms..

The bogeyman in all of this – sometimes named, often not – is monopoly.

The argument from current local monopolies and other incumbents is that if transportation is left to the market forces, it will lead to a monopoly that will raise prices, lower the quality and may even push city planning beyond the control of society.

The argument often heard from a smaller actor, let’s say a taxi company, is somewhat similar. They see a new sales channel as a potential parasite that may end up suffocating their entrepreneurial spirit and force them into slavery.

In both cases the worry is not without basis. Just look at Facebook, Google and Amazon and the control they have in their fields. Disruption is not safe, nor does it automatically lead to something desirable. But this is no reason to resist rapid change. Transportation must become greener and much more efficient fast if we want to save the planet and see cities grow and function at the same time. I don’t believe we can wish or wait for this to happen, nor can we force it. Instead, we must create a fair framework in which disruptive innovation can flourish.

The critical innovation in the transportation industry must happen in regulation. Regulation that opens the playing field up for truly user-centric solutions and keeps it that way is an absolute must and is also every player’s best insurance against misuse of power.

My rules of regulation would be the following:

  1. Fight trusts and monopolies fiercely and in all forms, old and new.
  2. Focus on maximizing the decision making power of the customer.
  3. Separate the service layer and the production layer. While we are fighting the old silos (choice between trains, buses, taxis, bikes…), we should not create new ones – meaning, each traffic operator exclusively controlling all hardware behind its service. Having 10 different companies all providing every mode of transportation but no interoperability between them is a nightmare from the perspective of sustainability and city planning.
  4. Use taxes to incentivize, not to punish. Owning and using an automobile is heavily taxed in many places, but with very little behavioural effect. Tax breaks to electric cars, on the other hand, seem to have an effect. In the world of Mobility as a Service the tax break should, for example, go to the operator that has the most desirable modal split between modes of transportation.

And while we wait for regulation to get up to speed, does the incumbent or the entrepreneur have something to lose by opening its service up to services like Whim? Our business model is not to sell bus or taxi rides at discount prices. Our business model is to create a service so delightful, that people will give up their private cars and switch to Whim instead. We do not wish, we do not force, we work in the realm of desires. When we are successful at designing a service that people desire, they will also desire all the transportation options it offers.