Sampo’s Blog: What Whim Users Can Tell Us About the Future of the Auto Industry

By Whim • February 2, 2021

By Sampo Hietanen, CEO and Founder of MaaS Global

To understand MaaS you have to understand cars. If you follow this blog, you know I keep saying that. If you have not dug into why some people are attached to their cars, you can’t create alternatives that people will voluntarily choose.

MaaS Global and our product Whim are built on the idea that we must beat cars at their own game. To get better at what we do, we constantly research the market. We model our user segments and test the models in real markets, we dig into and analyze our user data, and occasionally we do a focused research dive into the lives and attitudes of our users.

Recently we did a study among people subscribing to our service in Helsinki to better understand their relationship with cars (why they do not have a car, or why they have one or several cars). The main takeaways from the study relevant to MaaS are 1. car ownership is not rational and 2. cars are replaceable. The conclusion is: to replace cars, the alternative must appeal to the irrational too.

Almost a quarter (24%) of the respondents said that subscribing to Whim has helped them to either ”avoid using their car or to get rid of it completely”. Yes, the respondents are Whim subscribers and therefore don’t represent the general population, but that does not dilute the result, it enforces it. Once people use an alternative and like it, they see the need for a car with new eyes.

Above I used the word irrational because I wanted to underline the fact that the reasons people most often mention for owning a car are not practical, like taking kids to school or hobbies or moving heavy items (less than one-fifth of the respondents). The most popular reasons (around half of the respondents in our study) for owning a car is its availability and flexibility. These refer rather to states of mind than real-life applications. It would probably be more diplomatic and more to the point to talk about perceived value instead of irrational behavior.

And there are clearly two levels of perceived value. The first is the experienced freedom. A car sets you free. But if that was all, the cheapest car on the market would suffice. But not everybody is buying KIAs. Most people want something they might describe as nicer, faster, prettier, or more comfortable. On average people in industrialized societies probably get a car that costs at least twice as much as the cheapest alternative. This experienced value is what the automobile industry has been so good at creating and what drives it.

In our study, we also wanted to know which way the market was headed among our customers. When we asked car owners how likely they were to get rid of a car, 23% said they were likely or very likely to do that. Another 15% were undecided. We think this, altogether 38%, is a group we can be of service to (interestingly in a European-wide study a few years back the same 38% said they’d be willing to give up their cars if offered a viable alternative).

We of course love these results because we believe they prove that our publicly stated commitment to replace one million cars by 2030 is doable. But the change will not happen by polarizing car owners and mass transit users. Nor will it happen by relying just on rational argumentation. Our study confirms what we have believed to be true all along: we are dealing with something that is at least 50% emotional.

Given the right alternative, people are willing to ditch their cars. And based on our research, the right alternative is something people feel they are in control of. Car owners do not like to be given (even less forced) a bus schedule. They want to get to places when it suits them. And just as much as actually getting to places, they want to have a feeling that they can do that on a whim. A great user interface helps, but in the end, it is all about trust. If the operator, together with its partners, can provide a service that is never clunky and always available, it can beat cars at their own game, perceived freedom.

But for the revolution to be successful it has to appeal to the ”nice factor” too. People that own cars allocate 76% of their mobility budget on paying for them and for all the costs that come with them. Maybe 50% of that is paying for the perceived value of owning a particular car, and the more expensive the car is the more inflated this number becomes. The elephant in the room, or should I say on the road, is, will that money stay within mobility, when people start reaching for alternatives.

If mobility becomes a commodity, sold just over its production cost, this has drastic consequences to the whole sector, not just the automotive industry. To develop anything, you must have a surplus you can use. The surplus in mobility today comes from making cars that people desire and are willing to overspend on. This emotional surplus can then be taxed and used to build roads and subsidize public transport, or it can be used to research and develop new products.

When we build new, more sustainable mobility options like MaaS, they must appeal also to the emotional: the search for freedom, flexibility, comfort, and ”niceness”. If we are not able to do that, we will melt what I described above as the perceived value or emotional surplus from the industry. If we are to develop transport – and we must since it is currently the sector least likely to get its carbon emissions under control – the money cannot come from food, or health, or living, nor can we jack up the prices of public transport. The wallet currently allocated to automobiles is the only source.

As contradicting as it sounds, any attempt to attain sustainable transportation hangs on being emphatic to people’s affection for automobiles.