By Sampo Hietanen, CEO and Founder of MaaS Global
If not before, then now, after Uber and Lyft have announced that they are pivoting to Mobility as a Service, we must conclude that MaaS is massive. Or let’s say the forces behind MaaS are massive. The reality is still evolving, although at a convincing speed. In the not-so-distant future, people in major cities will start ditching their cars in masses and start getting their transportation on the go.
If this plays out right, it is a blessing. Less congestion, less pollution, more efficient use of energy, shorter travel times, better cities. But for it to happen this way, decisive action is needed, not just good faith or, in the worst case, negligence.
There are two major ways to go about building MaaS infrastructure: open ecosystems and closed ones. Open ecosystems mean that the interfaces to different forms of transportation are, by definition, open to all operators. In other words, everyone offering transportation services has access to all hardware out there. This thinking leads to optimal use of infrastructure which is the core promise of MaaS. A closed ecosystem is the Silicon Valley standard that always aims at a monopoly: Facebook for social media, Google for search and Amazon for retail. Yes, there may be lots of application programming interfaces to these services, but their business model aims at domination of their respective fields.
As Uber and Lyft enter the massive MaaS market, they should be welcomed but not succumbed to. From a city’s perspective, the challenge with the Uber model is that once let into a city, they want to have their own fleet of every modality under their control: the rides, the bikes, the flights…
The international mobility market is enormous though, and there will be competition, but once we start letting in one operator after another with their own fleets, our cities become more congested than they were. In economics, this exploitation of a limited public resource, in this case public space, is referred to as the tragedy of the commons, and it offers an ironclad argument for political interference with the free market in certain cases.
Once this is acknowledged, we should be careful about how we go about dealing with it. In some cities, the local public transport authority (the overseer) will try to tackle the problem by also acting as the operator (the provider) and build a transport monopoly around itself. The problem with this approach is that transportation will be global and no city has the resources to become an international transportation operator, nor does it make much political sense to use a city’s coffers to try to do so.
So, if there is resource-freeing MaaS and resource exploiting MaaS, what should the cities do? The what is actually the easy part: clearly, they should serve their citizens in this ever-changing world. The hard part is how to do this: how can they build a vision of the future that is so strong that they can act as puppeteers of what’s happening?
The opportunity is available and should be seized, but to do so, politicians and public servants must openly study the disruptive forces around us, commit time for some serious strategy work, be willing to take calculated risks, and be prepared to fail at times.
Vancouver is a city that gets this. Their vision-based regulation has created a well-functioning car share market, and a growing number of people are actually giving up privately owned vehicles.
Another example of visionary thinking is Rotterdam. Their reverse tolling experiment – paying car owners for not driving into town – is ingenious. A whole new layer of services was developed around this experiment. You could, for example, choose to cycle to work instead of driving, and as a reward you’d get a free personal trainer at the gym. To develop services like this, the city of Rotterdam, together with the Dutch government, has created a fund with several hundreds of millions of euros to help tackle the challenges of transportation.
Once upon a time the vision of progress, brought about by private automobiles, was so tempting that cities everywhere surrendered to it. The MaaS revolution of today is just as big, but this time around, instead of surrendering to it, cities should run it.
European cities are well positioned to make a positive contribution in all of this. Europe has done well in telecommunications by agreeing on common frameworks for competition, and it could do well in mobility. A great city of the future, together with other great cities, forms a well-functioning and open operating system on which applications that support good life are built.
Read my previous blog post: To Happen, Change Must Be Desirable