Blog 1.9.2022

How to Kickstart the European MaaS Market

With energy prices breaking records and climate catastrophe closing in, one would think that any promising initiative to reduce hardware on the roads and the CO2 emissions that come with it, would get funded. Especially when capital, both public and private, is in abundance. The European Union has reserved over two trillion euros for rebuilding after the Covid-19 pandemic. Private investment funds, even if currently in a more cautious mode than when stock markets were hitting new records, are also loaded.

Traffic has proven to be the most challenging sector when it comes to cutting down CO2 emissions. Electric cars hold a promise but are only a part of the solution. The answer is not just to change the power source but to reduce power usage. This means moving more efficiently and flexibly than in a private car. MaaS, not owning a car and choosing the smartest way to move for each particular moment and need, holds an enormous promise to change things and eventually alter how we view mobility. But it is moving along frustratingly slowly. Why are cities, countries, and the EU refusing this opportunity?

We are in a bureaucratic gridlock of our own making. When cities want something new, they publish a request for tender, receive bids, choose a winner, and wait for things to happen. This approach usually works when you build something that has existed before, like a road or a bridge. But when creating a new reality that requires behavioral change, a tender does not bring together the public and the private interests.

Instead of running local pilots that add up to little or trying to build nationwide platforms that choke on complexity, the EU should focus on kickstarting markets. MaaS could be pushed beyond a tipping point by replacing the unambitious pilots on the supply side with serious pilots on the demand side.

One way to do this would be to hand out vouchers, lots of them. EU could, for example, pull 100 million euros out of its over 800 billion NextGenerationEU recovery plan, pick three cities and make a 50/50 deal with local authorities in each one. EU would provide 33 million to each area, and another 33 million would come from the town’s coffers. Then the money would be handed out to local folks as multimodal vouchers to get around.

The catch is the monitoring of emissions. The vouchers would only be valid for choices that reduce the carbon footprint per capita and the number of cars on the roads. Operators with an ecological modal split (what modes of transport are used and in what proportion) and falling CO2 emissions would be allowed to participate. Others would not. Another requirement for the cities would be to ensure that plenty of private choices are available. You need several relevant competing actors to kickstart a market. Subsidizing a local transport authority with vouchers would not make any sense. Coupons to use public transport may be a good social policy in some cases, but it has nothing to do with developing a market.

In this model, the consumers would choose the winners, not the municipality. They’d give their money and vouchers to those actors that offer the most convenient service or combination of services, while the authorities would see that they meet the environmental goals. As a result, a critical mass of demand for MaaS would be reached on a whim (yes, pun intended), and the city would invite new investments and innovators like crazy.

When the governments have wanted to get the wind power or electric car markets going, instead of building turbines or cars, the public sector has chosen to hand out subsidies that have quickly taken these markets to the next level. The same would be the right course of action to boost MaaS. Right now, many countries are subsidizing company cars; instead, they should support reducing them.

It is high time we took the energy and climate crises seriously also in transport.  Europe should take decisive steps to become the number one market for MaaS. If it decides not to do this, the European emissions will keep growing until one day, MaaS solutions developed in Asia, the USA, Latin America, or Africa take over. This is a pattern we’ve seen so many times in many industries, for example, in media, computers, e-commerce, and micromobility. Slow, regulation-focused, indecisive culture hands the market to others on a silver platter.

This doesn’t need to be so. Two European success stories we should learn from come to mind. Europe took decisive steps to build Airbus to change the aviation market and succeeded. Likewise, when the Nordic countries wanted to develop the telecommunications industry quickly, they took decisive steps to let the markets do the work and succeeded. The same spirit and visionary action are needed now – more than ever.

Blog 31.5.2022

MaaS That Matters Is All About the Consumer

When the iPhone was launched, many gave it credit as a consumer gadget but felt that it had no place in business life or in the public sector. Corporate IT departments were used to buying Nokias and Blackberries, which made these phones the choice of the serious people. Nokia’s and Blackberry’s top-of-the-line models were B2B products, whereas iPhones were B2C products.

We all know what happened then. The users did not care about the categories, they cared about their experience, and eventually the new phones beat the ”serious phones” out of the market.

I’m bringing this up because I’m still often asked if MaaS is a B2C product or B2B, or maybe B2G (Business to Government). Whenever I hear the question, I try to invent a new and polite way to say ‘I don’t care’. And a new way to explain why no one should care.

MaaS does not exist because it is technologically possible but because it is environmentally indispensable. We want to get as many cars off the streets as possible, not because we hate cars, but because the carbon emissions caused by traffic are out of control and keep rising and because cities cannot grow if they rely on private car ownership. MaaS exists to change what people think is convenient and desirable in transportation.

You can change consumer behavior with regulation, taxes, or by offering something better. The problem with regulation and taxes is that people often hate them and try to find ways around them. But when you offer something better, first the cool people flock to your product, and then the rest. Therefore every world-changing product must win the consumers’ hearts and minds. Think of the automobile, telephone, washing machine, smartphone, and social media.

Sometimes MaaS is thought of as a technological solution that can be sold to transport authorities (B2G) or transport companies (B2B) to improve their customer experience. And yes, a local transport authority can buy and launch an app that brings its services to the digital age, but in the big picture, this changes nothing. The same people who already used public transportation will keep using it through a new interface.

To drive profound change, you have to onboard new groups by offering them something that has not existed before. First, you have to build the service with the end customer in mind, then you have to make noise about it, and finally, you have to sell it. The selling is the hard part, and something that organizations born to administrate cannot do.

As long as we debate what product category MaaS falls into, we miss the point – and the bus. MaaS should be sold to all, governments, municipalities, companies, and consumers, but its core, its promise to change things, depends on its ability to enchant individuals so much that they decide to ditch their cars.

Radical change gets a lot of likes but attracts only a few makers. When, back in the day, I was trying to decide if we should start the world’s first MaaS operator and if I should lead it, many said they wanted to enable MaaS. Seminars were packed, papers were written, and seed money was available. But when the time came to commit to building it, very few hands went up.

I don’t blame people for not stepping forward and rolling their sleeves. Building something new from the ground up and selling it to customers is excruciating, risky, and costly. It took me a while to convince myself that I should do it. But we all know that moment, that silent tension in the air. Everybody knows something must be done but is looking at the walls or their shoes – until someone breaks the silence and says: ”Screw it, I’ll do it.” In MaaS’ case, it was us.

One of the founder’s most important roles is to keep the discussion and activity on the mark while the world keeps pulling the startup in hundreds of directions. Winning the user is the point. The gatekeepers around the user, while essential and while we should convert them into partners, are not why we are building this.

I’m talking about this because now that people are moving again, MaaS is picking up again. The high energy prices and the ever-worsening reports regarding climate change only strengthen the trend.

Seeing MaaS as something that transport authorities or companies do and drawing conclusions from these local experiences is like someone looking at Facebook in 2004 and judging its potential by its engagement on campus or two. Network effects are powerful, but only when they are allowed to take effect.

While I strongly believe in low entry barriers and robust markets, I am no libertarian. We need to create and enforce markets through smart regulation and incentivize the actors in it. Smart regulation understands that consumers move globally, have needs that change daily or hourly, and are willing to ditch the cars if there’s a great alternative. It also guides consumers toward sustainable mobility options through incentives and remembers that life in a city can and should be fun.

A city-wide mobility app is a minimum viable product to test a user interface. It is the on-campus Facebook. We must set the bar much higher for genuine impact and release a wildfire among end-users to change the world. That is MaaS that matters.

Blog 25.3.2022

Teaming up to get MaaS moving

How do you scale your platform in an industry that is much too big to dominate? With help from your partner. Our newest move on that path is to team up with Brazilian MaaS operator Quicko and its previous owners Grupo CCR and J2L Partners. Quicko was founded four years ago, and it offers an efficient way to use public transportation in eight Brazilian metropolitan areas, delivered through a beautiful interface. In practice what happens is that MaaS Global acquires Quicko, and Quicko’s sellers CCR and J2L invest in MaaS Global. Then, with this structure, we develop MaaS in Brazil and worldwide together.

There are several reasons to be excited about this. The first, as said, has to do with growing the platform. The promise MaaS makes is to be available everywhere at any time. To achieve this globally is just too expensive if you go at it with a standard platform economy approach and try to blitzscale to world dominion, like Google, Facebook, or Netflix. Just look at the challenges ride-hailing companies and the micromobility players are encountering. They are trying to provide one modality, and just doing this demands insane amounts of capital. And MaaS – which wants to offer all modalities – is in another universe.

At MaaS Global we do not believe in the virtues of monopoly, nor do we see it as a sensible goal for us, or for anyone in MaaS. For environmental reasons, we have to rush MaaS. Therefore we cannot wait to raise gigantic amounts of money and aim to control the transportation market. Instead, we have chosen an open model. We seek partners that have proven themselves and are ready to join forces. And as we partner, we focus on aligning not just our technologies and services but also incentives.

A year ago, we partnered with WoNDo in Spain, and in the same manner we are now partnering with Quicko in Brazil. WoNDo was built and owned by Ferrovial, a major industrial operator in sustainable infrastructure. Technically WoNDo was acquired by MaaS Global and Ferrovial made a strategic investment in MaaS Global. Today, WoNDo and Whim work in unison, and the ownership of the two is aligned. Now we are repeating the exercise with Quicko and CCR, one of the largest infrastructure conglomerates in Latin America. Quicko and Whim join forces and CCR and J2L become owners in MaaS Global.

Instead of going around seeking capital to take over companies, we seek partners and gather momentum with them. We do it systematically, but we also believe in serendipity. The Quicko deal started when I sat as a guest on the Ride podcast together with Quicko’s founder Pedro Somma. After the podcast, we started talking about our plans for the future and the role of fundraising in making them happen. It did not take us long to start talking about how a partnership would be the fastest way towards a future we both want.

Partnering is our current scaling playbook, and I only see reasons to play more. What everyone seriously involved with MaaS wants is simple: fewer cars and better mobility. When Pedro and I talked about the congestion problems in São Paulo and Rio de Janeiro, I remembered how I was sitting on a bench in Istanbul in late 2015 and looking at traffic that wasn’t moving. I had just met with a potential investor Karsan Otomotiv Sanayii and Tickaret AS and was trying to decide if I should take on the role of CEO of the recently founded MaaS Finland (later MaaS Global). It would be a Quixotian task to take on the world’s car manufacturers, the oil lobby, the political passions, and the local interests that support our car-centered culture. But the traffic before me wasn’t moving. And the world wasn’t moving on a burning issue. One had to do something.

If no one does anything, the congestion and the emissions will go from catastrophic to apocalyptic. If you take a look at the statistics since the Second World War, the rise of the GDP and the number of passenger vehicles have grown in unison. More GDP means more cars or more cars mean more GDP. The direction of causality does not matter much here since the result is more cars no matter what. In Europe, there are currently 600 passenger vehicles per 1000 inhabitants. In Brazil, the number is 200 but rises as the GDP grows. This development feels unstoppable, even if putting more automobiles on the streets of major Brazilian cities or more carbon dioxide into the atmosphere makes no sense.

The telecom revolution and the adoption of cell phones is a metaphor I like to use to describe the possibilities of MaaS. Many of the same changes that made cell phones a success are available to MaaS: deregulation to build markets, international roaming to attract users, and business usage to make adaptation easy. But it does not stop here. What happened in many developing nations with mobile phones was that they were able to skip printing machines and landlines and take a quantum leap into mobile communication. And then there is our neighboring Estonia: after the Soviet rule ended, they went directly from not having modern democratic institutions to having the most advanced eGovernment in the world.

What finally pushed me into taking the job as the CEO of the world’s first MaaS operator was partly the scene in Istanbul. We have to start getting those cars off the streets, not by force, but by offering something better. The challenge in the wealthiest parts of the world is to offer an alternative to a car that is so good that people get rid (at least some) of their cars. The challenge in the countries that aren’t economically as prosperous yet is to build a service so good that people can jump directly to MaaS, and skip the economically questionable and environmentally disastrous worship of the privately owned automobile.

Skippering MaaS Global has been and will be a bumpy ride, but I’m happy I got off that bench and chose to try to move things. The goal is set, and the ways to get there make sense. It is all about getting it done now.

Blog 21.9.2021

Skiing in Switzerland and the Unit Economics of MaaS

I bet many of you have had a post-COVID dream, a thought that has helped you to get through yet another pandemic Groundhog Day on Zoom. Being an engineer, I prefer planning to dreaming. The grand plan that has kept me going has been to visit some of the best ski resorts in Switzerland, using our Whim app to get to them and also to get a seat in the lifts. 

It is no secret that MaaS Global’s international expansion has been slower than what we projected a few years ago. Therefore, we have researched endless markets, looking at demographics, psychographics, infrastructure, and, most importantly, transport networks’ contractual and political openness in different cities.

In business, to expand is an end in itself, but we have learned an important lesson about it along the way: in each new city, we must prove a new thing. So, in choosing the next market, a decisive factor has been our need to prove what we could not prove in Helsinki, our birthplace.

In Helsinki, we have proved that MaaS is technologically viable, that people like it and that it can replace a car. For that, Helsinki has been the perfect environment. However, it has not been an optimal place to prove that MaaS scales and that it scales profitably. To be completely honest, many of our packages in Helsinki have been prototypes rather than fully developed MaaS. This is due to the geographical area of operation and the availability of modalities.

The key to making MaaS attractive is that it should be synonymous with freedom, and being operative in a single city is not yet that. The key to making MaaS profitable is the ability to actively manage the modalities people choose, as I will explain in a moment.

When you start a business and eventually scale it, one of the things investors are most interested in is unit economics. In MaaS’s case, the unit is a single customer, and unit economics refers to direct revenues and costs that come with that customer during the time they use the service. Projecting promising unit economics can make or break an investment round, and of course, the company itself. It’s easy to justify a robust customer acquisition cost and even considerable production cost if it’s likely that the customer sticks with the service and brings in a high margin. But things can be the other way around, too: in the worst case, it is expensive to attract people to the service and to produce it, but customers tend not to stay or bring in much money. This is how many startups fail. 

In MaaS’s case, the question of unit economics is both highly lucrative and particularly challenging. The potential revenue stream is vast since we talk about 600 € a month mobility packages, not 9,99 € a month streaming services. The challenge is the production. In MaaS, it is different from how most other digital platforms work.

For MaaS to be a solid business, it must get three things right: when selling the service, it must appear to be better than owning a car, when producing the service, it must prove itself to be superior to owning a car, and when choosing the right modalities for the client, it must leave a healthy profit.

So, what will change as we now enter Switzerland? Two things: the availability of modalities and the geographic reach of our service. In Switzerland, the approach to mass transit ticketing and reselling is a modern one, and the barrier to entry to a MaaS operator therefore moderate. We are going to provide 3,5 million citizens in Switzerland access to single tickets and daily travelcards in six cantons; Bern, Fribourg, Neuchâtel, Soleure, Valais and Vaud. 

The Whim mobility service in Switzerland is offered in co-operation with key strategic partners such as Transports Publics Fribourgeois (TPF), e-scooter operators TIER Mobility and Voi as well as the e-bike company BOND Mobility. Other transportation partners and new modes such as car rentals, car share and more will follow in the coming months to provide Switzerland’s 8.5 million inhabitants with an even more comprehensive Swiss-wide mobility experience (and soon, I believe, even the ski lifts). Broad access like this, with several add-ons, brings Whim pretty much on par with a car of one’s own.

The unit economics in MaaS behave entirely differently than they do in fully digital services, for example, games or digital media. In fully digital services, it may be expensive to build the service and hard work to get the customers in and get them to pay, but once they start paying, the production cost is zero, and therefore the margin is massive.

In MaaS, the unit economics depend on something we call the modal split. The modal split refers to the components of each trip. Here lies the path to profitability in the long run. To demonstrate, let’s say we sell a package that includes taxis and bicycles. The more the customer uses taxis, the higher the production cost, and the more they use bicycles, the lower it is. Thus, the unit economics of the customer who bought the package depend entirely on how much they use each modality.

To bring the calculation closer to reality, let’s say a customer gets an unlimited monthly package and, in the beginning, uses a rental car for 24% of the trips and a taxi for 21% of the trips. The remaining 55% of the trips are public transportation, micromobility, and walking. If we, through intelligent route planning, can suggest faster and more convenient choices and at the same time drop the usage of rental cars to 19% and the use of taxis to 17% of all trips taken, we just saved 100€ in production costs per month.

Helsinki is unfortunately too small and too rigid to test this approach fully, but Switzerland will be different. You need enough people, enough choices, and open interfaces and attitudes to spin the multimodal wheel for the benefit of the customers, the environment, and a healthy business. We’ve already seen this work in Antwerp, where our service has been available for a while now.

In Switzerland, we will up the game and prove the Whim business model when it operates country-wide. Then, once we’ve shown healthy unit economics there, we are ready to proceed to bigger markets.

As we add new and bigger markets, there’s at least one more thing to prove:  the best way to enter a market. I’ve said many times that instead of demonizing cars, we must learn from the automotive industry. The same applies to the rollout too.  A T-Ford was not everything a car could be, but it had mass-appeal, and it was affordable. When enough people bought enough T-Fords, the roads improved, and a market developed for more advanced products.

 Currently, my expectation and our strategy at MaaS global is the same. When we enter a new market, we first prove the concept with a pared-down product among people who use public transport. Then, with an upgraded product, we proceed towards groups that have not yet considered an alternative to their cars. As the infrastructure and the modalities available for MaaS develop, what was once curious will become commonplace. And somewhere along the way, I’ll go skiing.

Blog 27.5.2021

Ready to Catch the Consolidation Wave

MaaS Global just announced its first major acquisition. The Spanish mobility service WoNDo, which has operated in Madrid since 2018, and its parent company Wondo Mobility, S.L. will become part of MaaS Global. At the same time, MaaS Global received a strategic investment from Ferrovial, a publicly-traded Spanish operator of sustainable infrastructure with a global reach.

This is a significant step for MaaS Global, and we are excited about the chance to bring Wondo into our family, but I would not say that the acquisition itself is a game-changer for us. I rather think of it as a logical step within the strategy we have followed and executed all along. What is changing is the game itself. And we are ready. Let me explain why.

A recent study by the renowned Center of Automotive Management in Germany positioned MaaS Global as by far the best multimodal mobility service in the world, way ahead of established players like BMW, Daimler, Didi, and Alphabet. After years of intense work to achieve exactly this position, we welcomed the result with cheers in the office. It also came at the right time. We are about to enter a new phase in the MaaS industry, and now if ever, it pays to be positioned as the company most capable of integrating across the board.

An emerging industry usually goes through phases, and several highs and lows, before it takes shape. First, the pioneers innovate and explore, then others spot the opportunity and pile on. Then everybody realizes everything will take longer than expected. Some quit, some pivot, some decide to push through the slow-moving period. But when things start picking up again, often the perception of the industry has changed. Time has done its job and what used to be an oddity is now accepted and an opportunity. And soon, the consolidation game is on. 

At MaaS Global, we are well-positioned to catch this wave, almost like a surfer that has trained a lifetime for the big one. Being among the original developers of the Mobility-as-a-Service concept and the first company to pursue it at scale, our actions have always been vision-based. Our teams have worked incredibly hard and with breathtaking stamina to develop the best UX, the widest variety of integrations, and the most developed monthly packaging models in the field. As with any startup, our journey has included more mistakes and disappointments than spectacular wins, but our vision has kept us on the path.

Today our core capability at MaaS Global is to integrate any mode or system of transport, from nationwide transportation networks to individual e-scooters. When I say integrate, I refer both to our technological toolbox, which has been developed and tested to handle any interface, and our experience in integrating all of these modalities into one crisp customer-facing app with monthly billing.

There are more potential integrations in our system than to any other operator in the field. We had just reached the execution stage with this toolbox when Covid-19 hit, and we had to pull back and keep improving our interfaces in the shop, rather than out in the streets. But now that the world is increasingly in exit mode, we are increasingly in integration mode. This puts us in the center of the board as consolidation gains momentum.

Now that the world is increasingly in exit mode, we are increasingly in integration mode.

Although the concept of MaaS has always been borderless, many applications have so far been geographically limited. Yes, Uber and some of the e-scooter companies operate internationally, but they are restricted to a few specific modes and are still mostly pay-as-you-go. True MaaS is multimodal and subscription-based. There have been barriers to make this a reality that scales, but this is now changing.

Technologically the world has become app-based. Everything is accessible through an app, and this means the physical reality behind the apps must be designed and organized to allow this. The consumer also increasingly wants to engage with everything as a service. This very much includes mobility, especially among young urbanites, and this is the key driver for the rise in demand for MaaS and subsequently for the consolidation of MaaS actors.

Regulators are just waking up to the new reality. The demands of environmentalists, technologists, and new generations are increasingly impacting policies. Among the cities in which we are active, Antwerp in Belgium stands apart. There the local regulator mandates mobility services to integrate with at least three MaaS-players. This has created an exceptionally innovative smart transportation environment that supports the overall development of the city. As we at MaaS Global scan for future cities and countries to go to, we see that many places plan to follow Antwerp’s lead.

As the consolidation wave rises, it all becomes a momentum game. Those with a proven ability to integrate, most friends, and a good reputation will become desired partners and organizers of the next level Mobility-as-a-Service operations.

I expect those that are least interested in domination to prosper the most.

By momentum game, I don’t mean a race for world dominance like we’ve seen in search, social media, phones, and e-commerce. The world of transportation is simply too big for that. There will be mergers, and there will be partnerships, but I expect those that are least interested in domination to prosper the most. There will be no Google of transportation, but rather a network of networks in which the most valued integrators are those that are not hungry for centralized power but rather hungry for making the whole a success.

Blog 2.2.2021

What Whim Users Can Tell Us About the Future of the Auto Industry

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.

Blog 9.12.2020

What Segmentation of Mobility Customers Tells Us About The Future

MaaS disrupts, not only how people get around, but also how they are understood. Traditional traffic planning sees transportation as a huge machine that moves people where they need to go. When you add a service layer on top of that in a world where individuals expect to be served in a way that fits their lifestyle, we start talking about something almost other-worldly to your traditional traffic engineer. Humans.

Two years ago, at MaaS Global, we conducted what was for us a massive study on people’s needs and identities as mobility consumers. The research and the following analysis was made with TNS Kantar in Helsinki, Antwerp, Birmingham, Vienna, and Sydney. What we have, we believe, is a ground-breaking study in the world of transportation.

The automotive industry of course routinely conducts psychographic studies to understand the emotional and often subconscious motivations of customers. One might argue that a lot of their success is based on findings from these studies. But their scope is limited to cars. On the other hand, established transportation authorities and operators have traditionally had rich quantitative and statistical data to guide their routing and service development. Recently many of them have started using service design and even psychographic segmentation to improve their services. Their efforts are focused on the city they operate in, or at best the country level, and they usually approach the customers’ needs solely from the point of view of public transportation.

To our knowledge, ours is the first statistical undertaking combining psychographics, consumer archetypes, and mobility behavior in a multimodal context and on an international scale. Based on our research we segmented our customers into groups, not only according to their current behavior and concrete needs but according to their tastes, values, lifestyles, and openness to change. The study is both a look at how MaaS forces us to adapt to new perspectives to people on the move, but also a look at how the inevitable triumph of MaaS will progress.

Everyone in transportation is interested in commuting so let’s begin with commuters. Are they a target group? Yes. Are they a segment? No. A traditional traffic planner builds a bus line to service people commuting from a suburban area to the city center. Target group served. Box checked.

This approach fails to acknowledge the different tastes and preferences of commuters and forces them all into one mold. The result is a world polarized into good public transport commuters and bad private car commuters. If we want to get beyond this division and build attractive MaaS, we must go the extra mile and add flexibility and personalization according to the segment’s preferences. Our research tells us that the winning formula seems to be situationally adaptive mixed modality.

And while we work on this we must keep in mind that change takes its time. When you slice a population into segments, what you usually get is a bell curve. In one end there are the curious ones, in the middle, you have the somewhat slow majority, and in the other end folks that are not very open to change. Even if you are aiming your new service at everyone, you have to start with the curious ones and progress with determined patience.

Also, our segmentation follows this curve, and now, still, at the beginning of our MaaS journey, we are focusing on two groups that are most open to change. We call them Urban Mobility Seekers and Conscious Urban Dwellers. Both love new digital and sustainable services, but for the former group experienced comfort and lifestyle fit rules, while for the other the sustainability angle is the decisive one. These are the groups that will lead the revolution but for slightly different reasons and therefore they have to be addressed differently in mobility offering, interface design, messaging, and pricing.

Once we are strong in the first two segments (for example in Helsinki half of our current users belong to the eco-conscious segment, while they make up only one-fourth of the general population), we will start speaking to the third segment we call Affordable Transition. They are not emotional about their mobility choices, they simply want to save time and money. While we can offer that too, right now that is not the spearhead of our argumentation in most places. The late majority and the laggards, as they are called in marketing lingo, or The Settled Suburbia and The Car Loving Suburbia, as they are called in our vocabulary, will follow in 5–10 years when MaaS has become mainstream.

What we’ve been describing here is just the surface of our study, but it already illustrates why treating all individuals as commuters and approaching them with the same package and communication makes little sense. With the whole data set and analysis in our hands, we can make both informed strategic and tactical choices.

Our strategy is to get one million car owners to switch to Whim by 2030. The cars themselves are not our enemy, but we see replacing them as the ultimate measure of our success. To reach this, we must appeal to the game-changing groups first, but to do this right it must be a two-way street. We must catch their interest but they must teach us how to do things right. This way, together with our early-stage customers, we can build a consumer experience so good that it ultimately makes car ownership redundant both psychologically and pragmatically.

The fundamental takeaway from all of this is that while regulation and new technologies play a part in the mobility revolution towards more sustainable and less space-consuming options we should not overlook the human mind. Both conspicuous and conscientious consumption has to be seen as human traits and used as pathways to the future. Instead of overriding them with universal solutions, we must appeal to them and see them as locks that can be opened with the right keys. They are the keys to the future.

Blog 30.10.2020

It is All About Data, but What Data

For a while we’ve been hearing that data is the new oil. It sounds catchy, and yes data can be valuable, but raw data is like crude oil. There are different kinds of crude and they are useful first after refined – and refined for the right purpose. Diesel fuel for a bulldozer is different from plastic used in an artificial heart.

When you look at an organization like MaaS Global that wants to reorganize the world’s mobility, it is easy to presume that we are in the transportation data business. Yes, we sit on a mountain of data on how people move and use that every day to improve our service. But while it is important to know what is actually going on, in a space that is constantly developing, it is at least as important to know what people would like to see happening. In other words: a growing company in a growing market is good news, but if that company also knows where the market is headed, it is the one to watch.

At MaaS Global we mainly deal with three kinds of data: data on how people travel, insight into what they want, and experience in what they are willing to pay for. And all of this of course in different geographic locations.

The first, as said, is what one might think of when we look at a Mobility-as-a-Service company. So far we have data on 16 million trips: where, when and how people moved and which package they used. We use this to develop our application, packages, routing, modality split etc. Based on the data we can also run experiments and look how changes in user interface or pricing affect behavior. We’ve also tried introducing new data layers to our service, for example the times and locations of urban festivals. How people have used those, teaches us about what additional services may work on a mobility app and what may not.

Here I must also add that our business is not to spy on people and sell the results. When we collect data, we always choose the least intrusive way. When we handle data, including payment data and personal data, we are extremely cautious. But we do believe in open interfaces, and we do believe that people should own their own data, not corporations.

So, there’s transport data and then there is plenty of other data that is just as important. While the Whim app gives us data on kilometres and directions, it also tells us something about how our customers feel since they can chat with us through the app. This is of course not our only way to stay in touch. Through different channels we receive thousands of messages from our customers telling us what they like, what they don’t and what they want. When we test things based on customer feedback we learn when they mean what they say and when not. For example, we recently received a strong push from our users to add a calendar feature, an integration that would show a planned trip in the user’s calendar, but once we introduced it, practically no one used it. Similarly we learn about price elasticity of new packages and features (people are extremely sensitive to changing price of public transport, but not so much to the price of car rental).

In the end, going live with a package and a price is some of the best testing and data gathering you can do. Last spring in Helsinki we did a pilot that was both a sobering and an exciting return to the original vision of MaaS. In February we introduced the Whim Ride package to a selected group of users. The pilot group was picked so that it represented our core audience of urbanites that move a lot, but also so that it would be demographically diverse and offer us insight into different use cases.

With Whim Ride we did not sell trips, but made a promise that we would offer the users the most convenient way we could find to get them where they were going. For full service that included public transportation, taxis and rental cars, the customers paid 249 euros per month. During the pilot we did not just explore how well our service functioned, but also how the customer’s experienced satisfaction related to the price that they paid.

We observed how much folks used taxis and rental cars in relation to public transport, how rental cars should be available, how adding electric cars to the rental fleet affected the use of rental, and to what percentage of the users was public transport the backbone of their mobility. We also interviewed participants about what modalities they were missing, what their mobility pain points were (taking kids to kindergarten and groceries home for example), how their own values were affecting their mobility choices and what they wanted to know about the workings of the service.

What we learned was kind of a reset to square one in our thinking. It is so easy to get carried away with all possible add-ons, but winning in MaaS is about the core promise. People want a clean routing experience and they want to understand how the route was composed. They also need many different modalities to satisfy personal preferences and needs at a particular moment. When a lot of people move a lot, there must be plenty of options.

To make MaaS internationally scalable, you still need some additional data, and again it may not be what you think of first. When we enter a new city we are presented with a myriad of data on distances and routes travelled. But we have learned that data on transport is much too narrow an approach, when the aim is to change how people move. We need data on weather, on urban structure, on culture and on buying behavior. We have to look at the future of mobility through the eyes of the citizens, not through traffic stats. To this aim, as the first mobility company we recently conducted an international segmentation of mobility customers. It has become the lens through which we look at new markets.

Altogether the 16 million trips made on Whim, the roughly 100 000 messages from users, occasional deep dives like Whim Ride and our international segmentation tool form an understanding, not just of how to best serve customers today, but how to meet their expectations tomorrow. Maybe we should not compare data to oil. Data that matters is much more of a hybrid solution.

Blog 22.9.2020

Why We Must Beat Cars At Their Own Game – Our 1 Million Cars Initiative

Roughly 120 years ago some of the world’s major cities had an environmental catastrophe of biblical proportions in their hands, and they saw no cure for it. Life was turning unbearable because of stinky by-product of progress, horse manure. And it was not just the stink. Manure attracted flies, and when it dried, it turned into dust and flew everywhere. And there were lots of it. In 1900 in London there were 11 000 horse-drawn cabs plus thousands of buses each requiring 12 horses per day. In addition to that, there were all the horses needed for delivering goods. That’s a lot of horses, each producing 7–17 kilos of manure every day. In New York, in 1900, there were 100 000 horses that produced over one million kilos of manure every day.

And the more affluent the society grew the more horses were needed. In 1894 a writer in the Times of London estimated that in 50 years every street of the British capital would be buried under three meters of manure. Four years later, in 1898, the first international urban-planning conference in New York was discontinued after three days, instead of the scheduled ten, because the attendees could not see a solution to the mounting manure crisis. Because of horse droppings, there was no future for cities.

In hindsight we all now know how the crisis was cured. It was not regulation limiting the amount of horses in the city, or the amount of dung a single horse was allowed to drop in a day. It was the automobile that saved the cities.

Today the automobile has become the new horse. As we are striving (are we really?) towards the 2030 European climate goals of cutting our emissions by 40% (or maybe 55%) compared to what they were in 1990, the only sector which performance is totally subpar, and increasing its greenhouse gas emission, is transportation. And 2030 is not way in the future, it’s tomorrow (Think back to 2010: Deepwater Horizon explodes, Arab Spring starts, Eyjafiallajökull erupts. 10 years is not much.)

To us the takeaway of the horse manure story is not that a pressing environmental problem will eventually solve itself, but that people will swiftly change their behavior if there is a superior alternative. Cars beat horses because they were better.

As this blog comes out, MaaS Global has just launched its sustainability initiative of replacing one million privately owned cars with something better, our Whim subscription. According to our research, 38% of Europeans would give up their cars if they were given a viable alternative. This would mean 70 million cars off European roads. Our initiative aims at wiping out a million. This may sound bold for a single company, but in the larger context it is anything but enough.

”Wiping out cars” may sound aggressive, but at MaaS Global we are not car-haters, and don’t believe in policies that focus on eradicating cars. We respect cars. They are a great product and they have an important role in most of our consumer packages. But we are convinced that we all must get aggressive about finding alternatives that limit their quantity. If we don’t, we too face a future of being buried under three meters of something nasty.

Everybody working towards a revolution in transportation must keep in mind that the solution to climate crises requires offering better and concrete alternatives to what exists today. And there should be plenty of them. That’s what will bring the big changes. The times for haggling percentages, protecting age-old fiefdoms and letting egos stop the needed changes are over. We must act now.

As we’ve seen with Covid measures, masses don’t respond well to tough restrictions, at least in the long run, no matter how grounded on science and current knowledge they are. But people are quick to adapt to new alternatives and technologies that make their everyday better, as we have seen with the arrival of the smartphone and all the digital services it enables.

The key to dealing with the climate crises lies is moving fast but respecting individual freedom. Things happen when people don’t feel they were forced to do something, but when they are delighted that they were given something better than the old stuff. At MaaS Global our initiative is that we will be better than a million cars. Well, for starters.

Read more about our sustainability commitment to replace 1 million private vehicles by 2030 and other actions we’ve taken to bring sustainable freedom of mobility to all.

Blog 1.9.2020

Why We Should Trust Networks, Not Traffic Tzars

It’s easy to think that efficiency and resiliency are enemies. Efficient public transport systems are crippled due to the virus scare. Optimizing office space utilization drives people to work from home. Highly tuned international supply chains reveal their vulnerability when nations start acting selfishly.

But if we take a closer look at what is failing during the pandemic, it’s not the search for efficiency itself, but centralized structures and lack of alternatives. On the other hand networks tend to prove both their efficiency and their resiliency during times of crises.

Distributed networks have been studied well before the arrival of the Internet. In a network a signal often travels faster between two nodes than via a centralized hub, and the setup is resilient should anything happen to a node or several nodes in the system. The impulse does not get stuck, it is simply rerouted. That’s how the network providing signal to your cell phone works and that is how the Internet works. That’s actually also how modern military or many activist movements manoeuvre. And that’s how I think transportation should work.

So why are we still trying to cram everybody into the same bus or office or rely on one factory in China for live-saving drugs? I’m afraid the real challenge here is not efficiency, but control mindset and quest for power.

I am a traffic engineer by training. Based on what I learned at school, the best possible response to the Covid crisis in transportation would be total control. I’d know everyone’s needs and I’d now all hardware available, and I would optimize it all based on safety and economy. My model would then reserve people slots when and how to travel and no other behavior would be acceptable. You’d have to take the 01:37 train home, or you would be picked up by the Covid police and thrown in the slammer.

The problem is that I would not want to live in my perfectly optimized Covid resilient society and neither would anyone else, as long as they have a choice. Market economies do not exist just because they tend to be more efficient than any other system. They exist because of freedom of choice. People brought up in democracies and market economies do not easily succumb to uniformity.

So, although there is a significant shift towards central command during a crisis – as we’ve seen during Covid lockdowns, quarantines and stimulus financing – people will start testing the limits as soon as they can – as we’ve also witnessed. Any lasting solution in a democracy, although aiming at common good, should take into account an individual’s quest for freedom.

The great promise of the Internet was to make supply and demand transparent, and provide a platform where they can meet without central control or shady dealings. This change has been marching on, function by function, industry by industry, during the last 25 years. Only recently has it reached transportation: the supply of taxis and other rides, eScooters, and public transport has been made visible in many places. But the supply is terribly siloed and fragmented. What’s still in the early stages of development are the platforms, like our Whim, where all is visible, organized and available for choosing.

The real picture of the digital economy is of course not as rosy as this. Unregulated markets lead to monopolies as we are seeing as some spectacular Internet companies are monopolizing the marketplaces for search, advertising, holiday rentals and retail. The problem however is not the existence of these platforms, but failure to regulate them. Transparency in itself is a good thing, but we just shouldn’t be naive about it.

A central Key Performance Indicator to follow, when the digitally enabled transportation revolution unfolds, is how much of the data concerning supply and demand is visible at one moment. I think that during the Corona crisis and in its aftermath we will see a jump in transparency, of both supply and demand. At Whim we are currently witnessing record increase in subscription numbers because people want to express their needs and know their options. But the big question is who do we, as societies, trust to optimize the market?

The engineer in me says centralize, the entrepreneur and the citizen in me says let the market decide, but regulate. The exponentially increasing amount of data should serve developing systems that are more efficient than what we have today, but also more resilient, in other words based on network models, not centralized command. The only way to achieve this is to maximize transparency.

Blog 6.8.2020

Why We Should All Buy Into the MaaS Hype

Crises puncture bubbles and inflate new ones. Recently, in the world of mobility we’ve seen the great hope of yesterday, the Segway, halt production while the value of today’s promise for a better future, Tesla, has gone through the roof.

Both Segway and Tesla represent admirable technological achievements, but are single device solutions to multidimensional problems. Segway was fantastic when cruising down sunny ocean boulevard, but a terrible means to pick up the kids in a hale storm. A Tesla may not directly emit CO2, but replacing combustion engine cars with electric ones bears an enormous environmental cost and does not solve urban congestion.

As a solution to the world’s transportation problems, MaaS is fundamentally different. Its multimodal service-based approach aims at changing the whole system, not just adding one more shiny object. And that’s why MaaS will be the next red hot investment playground. The potential is staggering. When households start moving the five or six hundred euros per month they are using for the upkeep of their cars into mobility services, this will make the telecom revolution look like child’s play.

Most in the mobility sector see this and are attaching a MaaS stamp to everything they do. This is why Uber started talking about itself as Amazon of transportation before its $82.4 billion IPO. That is why last May Intel made a strategic MaaS move and bought the urban route planner Moovit for $900 million.

The Covid situation is making the MaaS M&A landscape increasingly interesting. While mobility companies suffer from lack of demand and therefore of diminishing cash flows, the investors are benefitting from stimulus cash. Things can be bought for fire sale prices while money costs nothing. In this environment empires will be built, but also bubbles. The predators are circling, but so are constructive visionaries.

Even before the Covid crisis I had expected a shopping contest to begin this year, and every outfit declaring itself a MaaS company becoming a possible acquisition target. But M&A fever is still building up, not raging yet.

The most conventional approach to empire building is to consolidate smaller actors into bigger entities within an industry. This is done in search of increased market share and synergies. Sometimes it works, oftentimes not. Market share may not be coupled with increasing margin and achieving synergies may turn out to be tricky in real life.

I think consolidation across sectors and cooperation through cross holdings present a far more interesting approach. Size is not at the center of MaaS. Trust is. Transportation is an awfully siloed and old-fashioned business, and winning customers’ trust and building mutually beneficial partnerships takes time. Once these have been achieved they become powerful assets. Investing in companies that have a good trust record and building good relationships with them may be far wiser than simply buying anything labeled MaaS.

The main reason for this approach is that to function, MaaS must be an open ecosystem, and in ecosystems the winners are the ones with the most friends, not the ones that seek absolute control. The world of transportation is simply too big and too capital intensive to be controlled by a monopoly or an oligopoly. In an open ecosystem trust is much easier to establish through cross holdings and resulting shared fate, than through contracts. Open ecosystems can also be vulnerable. If one component fails, it affects the whole system. This risk can be mitigated through cross holdings and a mutual alarm and support system based on that.

Cross holdings also complement contracts (or vice versa!) when you are building a future that is unknown to all participants. It may be much faster and far more efficient to swap some ownership than to try to come up with a contract that takes into account everything we don’t know yet.

In the MaaS game we are still far from a bubble. Consumers get and are drawn to the idea of MaaS, but the business model is not ready for massive growth quite yet. But we will get there soon, and then we will be talking about something far bigger than single gadget solutions like a Segway or even Tesla.

When the business models start falling in place, and when investors start seeing the benefits of ecosystem thinking and cross sector consolidation, this space will be flooded with money. The winning companies will be those that have an overarching vision for the future of transportation, a tested use case and capabilities to get things done fast and to form trust-based alliances.

As a result we will get on a fast track towards more sustainable global transportation structures. Will there be a bubble? Most certainly so, but personally I do not worry about that much. Bubbles are sometimes necessary byproducts of building momentum. Once they burst, and the dust settles, what’s left are a changed industry, the best solutions and most resilient organizations. And that’s what we want, right?

Blog 2.7.2020

The Massive Opportunity of Living as a Service

Mobility as a Service is set to change how the world moves, but if we only focus on transportation, we may be missing the bigger picture. If Amazon had kept focusing solely on books, it would not have changed the world of retail. If Apple had kept pumping out great desktop computers, it would not have changed the way the world communicates. If Facebook had stayed the frat house it was in the beginning it would not have changed how the world advertises.

Now, MaaS Global is not trying to imitate the business models of these monopolistic companies. In mobility, monopolies are part of the problem, not the solution. I’m bringing these successful disruptors up because they teach us how we must keep our eyes open for major changes around us.

When disruption occurs, the greatest benefits don’t necessarily come from one sector alone, but from inventions that combine services from different fields. This I expect to be the case with mobility too. Mobility is a support structure for life, not an end. We have to get to work, to the supermarket, back to the family, out to get some exercise… Only adolescent boys think – or used to – that sitting in a car is the purpose of life.

The MaaS revolution is not driven by technology, but rather a change in values and lifestyles. Sustainability is becoming ubiquitous, experience economy is challenging the stuff economy and urbanization is a megatrend. To understand the future of mobility and the opportunity is to think what mobility connects to.

The biggest (and the most rigid) industries in the world, in addition to transportation, are real estate, health, food and energy. They are all changing, but a lot what we see is marginal. The big stuff is yet to come. All these sectors connect seamlessly to mobility: where you live is the starting point of it all, how and how much you move has direct consequences to your health, food is all about logistics and energy powers it all. Seeing transportation as a symbiotic activity with these sectors is a healthy strategic and business model check.

Let’s take a closer look at living. It’s the biggest consumer business of all and real estate is the biggest of all businesses. How MaaS can have a profound impact is best demonstrated by looking at one single parking space built at a suburban development. We recently studied a new development nearby with a friend and calculated that the overall cost of each spot had been about 50 000 euros. In Finland parking spaces don’t go for that price so it ends up camouflaged in the cost of the apartment or its maintenance or it’s paid through taxes.

What if we spent that money differently? With 50 000 euros you could get our Whim Unlimited package that satisfies all your mobility needs for more than eight years. And during all those eight plus years, you’d be saving the cost of owning and maintaining a private car, on the average 500 euros a month.

So, what if, at a new development you could use the space reserved for cars for housing or parks while saving the inhabitants a ton of money? Mobility would not be a separate issue and cost but it would come with the residence, as a service. The prerequisite is a MaaS infrastructure you can trust in: it must be fast, convenient and resilient, come strike, bankruptcy or pandemic. To develop that kind of infrastructure requires a scale that we have not seen – yet.

This is one of the possible futures we are exploring at MaaS Global. Last year we started a strategic partnership with one of the world’s premier real estate companies Mitsui Fudosan that is also a MaaS Global investor. Together we are exploring in the Greater Tokyo Area what it would mean if MaaS services were included in the rental agreement of an apartment.

In introducing MaaS there’s always the chicken and egg problem. Without a robust supply the demand does not develop and vice versa. With a strategic partner like Mitsui Fudosan this is not as much of a problem. The goal is to find new business models for urban development. If a model looks viable, an operator like Mitsui Fudosan has the muscle and the strategic capabilities to scale it from a few families to whole neighborhoods, of let’s say 500 000 people.

This can profoundly alter how new neighborhoods are built, but also where they are built. If, through MaaS solutions, the new development is not dependent on trunk lines, i.e. it does not have to be situated next to a railroad or a highway, this has a huge effect on the zoning possibilities and the real estate game.

As the MaaS market develops we will see plenty of mergers and acquisitions. Some of them will be driven by size in search of market positions and synergies. Some of them, and I believe this is what the winners will do, are driven by strategy: what are the larger lifestyle changes that are possible, desirable, sustainable, and offer fantastic business opportunities.

Blog 9.6.2020

Mobility Is Europe’s Best Chance to Get Back Into the Digital Game

The US and China are calling the shots in the digital age. Europe has lost its edge and become insignificant, a test market at best. We keep hearing this and while some of it maybe true, a lot is optics. Europe’s hardly out of the game. The EU is the world’s largest single market area and the current Commission is working harder than any of its predecessors to digitize it.

Efforts on this are very welcome. Europe’s challenge is not lack of innovation, not lack of education, not lack of money or lack of curious customers. The problem is that in the digital realm the European Union has so far failed to deliver on its core promise, a single market. The whole idea behind digital economy is that services can scale fast and for practically zero marginal cost. The volume drives prices down and the value of the network up (each new user makes the whole more valuable for everybody). If you cannot scale, you do not have a digital economy. In Europe’s case digital services run into obstacles at every border and national markets are too small for the network benefits to fully materialize. That is why we have fallen behind.

Mobility-as-a-Service (MaaS) offers us our best chance to get back in the game. Transportation is the world’s second biggest market after real estate and it will soon go through a massive disruption. The drivers are climate change, congestion and digitalization. The future belongs to digitally accessible mobility services that are easily available whenever, wherever the customer wants them.

To estimate the size of the consumer market just think that in telecommunications the average revenue per user is around 30 euros a month, in transportation it is easily around 300 euros. In all, the world-wide transportation market presents a 10 trillion-euro opportunity.

Europe is the best prepared region in the world to benefit from all of this. We have the best public transport systems in the world. They are the backbone of well-functioning MaaS. New transportation systems rely on the Internet. Generally the connections in Europe are the best in the world, as is our roaming. The trailblazing companies and initiatives in MaaS are currently in Europe. The US is far behind because the culture is built around car ownership. In Asia the digital and societal change has been fast, but so far mobility has not been a priority.

So, the game is rigged in our favor. But if we repeat some of the mistakes made during the telecommunications revolution, we lose. Europe was first to introduce standards and build well-functioning infrastructure, but the great companies providing services were born in the US or Asia. There’s no European Amazon, Google, Alibaba or TikTok.

So, what should we do? Here’s the list:

Open all public transportation services for innovations (this means open interfaces and fair reselling agreements)

Make sure all other transportation providers do the same

Police this to guarantee that markets are truly open and entry barriers low

Open transportation data for all to see

See that all services honor all payment methods

And this isn’t just a digital disruptor talking, this is what European consumers want. In a fresh FIA survey conducted in 10 European countries, an overwhelming 69,5% of the respondents said they’d prefer a single app to book all their transportation.

If we took the measures described above, an insane burst in creativity and development would follow. Remember what happened when Apple opened its App Store to developers and anyone with the skills and the smarts had a chance to jump in? A new global market and an innovation ecosystem was created almost overnight. Imagine if the APIs in the world of transport were open for any engineer, today working on games, to build European mobility apps. Innovation would explode, the best apps could scale European wide – and then take the world.

And now I am not only talking about customer facing apps like Whim. Transportation is an extremely complex and heterogeneous network and solutions to boost integration and efficiency are needed at every level and at every node. Possibilities for improvement and businesses built on those are limitless.

In a market like MaaS, we could also find a competitive advantage in European values. Respectful treatment of personal data, open ecosystems, inclusion and sustainable public private cooperation are at the core of the MaaS concept. This is a different approach than that of the Silicon Valley or Asian giants, and an approach probably much appreciated by consumers also outside of the EU.

Europe is superior in its public transportation and communications infrastructure and this gives us a huge competitive edge. But whether we decide to benefit from it is a bit like asking if a bottle is half full or half empty. The focus should not be where we are now, but what we will do next. If we hold onto local mindset and think regulation means more restrictions, our chance is gone. But if we use regulation to create an open, low entry, well-functioning single European market for mobility, we honor the fundamental idea of the European Union: we create prosperity, safety, inclusion and stay relevant.

Blog 18.5.2020

Helicopter Money to Transform Mobility

When the world shuts down, one of the first things to vanish is traffic. When the world reboots, one of the first things we must get going is mobility. Despite all the telecommuting and conferencing available, economies will stay half paralysed until we get people moving again.

As governments and central banks are executing and planning stimulus packages of unforeseen magnitude, what would be a constructive way to approach transportation? Should we erect bridges, build highways, lay railroad tracks? That is the traditional Keynesian approach: create public works to ease unemployment and boost economy while building for the future. When timed right, these measures help to flatten the cyclical nature of national economies.

But COVID-19 is not a downward business cycle. It is a vicious disease that kills people and economies and shuts down our way of life. In many cases both supply and demand have fallen into an abyss: you can’t fly but you don’t want to either, you can’t hold a conference or go to a concert or a football match but you would not dare do that anyway. And even if there’s extra credit available for businesses and consumers, many are afraid of bankruptcy, unemployment or falling ill and don’t spend.

In extraordinary times extraordinary measures are discussed. Helicopter money, simply giving folks extra cash to spend, has been frequently mentioned as an economic equivalent of an adrenaline injection to a motionless body. The original idea is that folks can spend the free money as they wish. But when jumpstarting economy we should not feed the other, even bigger crisis, the climate catastrophe.

Could we combine helicopter money with investing for the future? What if, instead of building roads and airports, we’d give the money directly to the customers to use for their favorite means of transportation? Instead of boosting supply, which tends to be more of what we already have, we’d boost demand, hoping it would reflect what we need.

If we throw wads of cash at people to spend on any transportation, many may end up buying cars and increasingly jamming the roads. But what if we manipulate their choices by making environmentally sound spending more lucrative that any other? If you bike lot, you get a lot. If you drive solo in a Hummer, you don’t.

Would consumer driven change, instead of centrally planned, lead to deteriorating infrastructure then? Where there is very little demand, probably yes, but where there is demand, probably no. Look at what has happened in telecom business in many countries where freedom to compete has been accompanied with national and international standardization and legislation. The investment has been skyrocketing and the infrastructure improving while the businesses have stayed profitable and consumer prices reasonable.

Transportation is not telecommunication, but we can learn from it. So, what would climate friendly helicopter money for mobility look like in practice?

The first step would be to give every citizen a voucher, worth let’s say a hundred euros, to use for transportation services: public transportation, micromobility, MaaS, taxies – whatever, but anything that moves the society away from current car-centric single-user reality. This model would already have an incentive to use your money wisely: a bus would get you much more mileage than a limo. (Actually something like this is already being tested in France, where the government just launched a “Sustainable mobility package” as a part of releasing the country out of confinement. The package encourages employers to kick in for their employees’ commuting expenses for up to 400 euros, as long as it’s done sustainably. The subsidized transport options include cycling, carpooling and carsharing (of low-emission cars), free-floating vehicles and public transportation tickets.)

The next step would be to give everyone a carbon emission permit worth a hundred euros. Your mobility app would have to be tweaked to count the cost of travel in carbon dioxide equivalents instead of euros, and then you’d get to travel as far as your emission permit takes you. In a low emission vehicle like a tram or an electric car (using renewable energy), you would get far, in a gas-guzzler not very far.

This would be – or should I say will be, since to me it is only a matter of time – a massive positive game changer in transport. It would finally move us towards what the world needs more than anything to get smart about slowing climate change: emission-based accounting.

As European Union moves ahead with Green Deal and the proposal for a legally binding European Climate Law, The Commission will review and if needed revise, by June 2021, all policy instruments to achieve the necessary emission reductions. My bet is that emission-based accounting and taxation will be at the center of that table.

Once this alternative way of accounting cost of travel is established and has become how we perceive and pay for transport we can finally start making sound choices regarding traffic systems. Currently we are still partially optimizing for rail transport, or for private cars, or ride-hailing but fail to see the whole. But when the true environmental cost of different modalities becomes transparent and comparable, everything changes. The technology to do this is with us already. Do we use this disruptive moment of a lifetime to make it a reality, is the big question. I cannot see it happening through traditional public works programs, but I can see it happening through a demand-driven change that is both stimulated and regulated by smart governments.

The end game is much bigger than transportation. Real-time emission-based accounting and taxation is the tool that will finally put us on the right track regarding climate change. Once this is in place, you are not taxed for a car that sits in a garage, not for the size of your house, not for prize of you meal, but for the emissions your lifestyle creates. And when people need support, society can do it through an instrument that has a built-in incentive to act responsibly.

These are my ideas on how not to let this crisis go to waste in the world of transportation. What would be yours? Let’s continue this discussion on LinkedIn and Twitter.

Blog 21.4.2020

Do Not Let Frustration Blind You of the Silent Revolution

Right now Mobility-as-a-Service is living through a moment in which the realities of those who build it and those who’d like to use it are mile apart. We, that are in the building business, see tectonic plates shifting in the players’ attitudes and technical aptitudes. We are finally seeing changes that will enable the new freedom without owning a car. Meanwhile, more and more consumers understand the promise of MaaS, but are frustrated because they can’t yet have it in its full.

I think the digitalization of the music industry, especially the development of iTunes, offers an interesting comparison. The world of music did not change when it went digital, it just went from vinyl to CDs. Change came with the Internet, pirates like early Napster, and finally with iTunes that made downloading music from the web both legal and easy. One quite commonly shared view of the iTunes revolution is that the really heavy lifting was not the technology, the service itself and the iPod user interface, but it was the deals Steve Jobs negotiated with the record companies to allow their music to be downloaded.

Without challenging the view of Steve Jobs as a master salesman and dealmaker, I think we should note that none of these deals would have mattered, if the digital libraries of the music companies had not been in order, or put in order. Technically, it all hung on the capabilities of the backend systems of the companies providing the content.

And that is where we are with MaaS at the moment. To be able to offer the travellers the experience they deserve, a MaaS operator must, not only be able to connect to and make deals with the transportation operators, but be able to use their offering as smoothly as possible.

To me 2019 was a pivotal year. Cities and transport operators started putting their technical capabilities and their transport libraries in order for the coming digital shift. Only when that’s done, can we focus on the deals that make MaaS possible and hone the apps to bring the best possible user experience. Here’s some heavy lifting that is currently going on:

On the taxi front Free Now (previously Hailo and myTaxi) and Gett have done an admirable job to build a European taxi hailing infrastructure. Their trailblazing work is transforming the whole taxi business from something traditionally very local to something increasingly global.

In car rental sphere there are still big challenges. To make MaaS work, short term car rental is a must, but making rental contracts is still bureaucratic and slow. What’s known as KYC (know your customer) technology in the lingo, including the trust networks that go with it and the very simple-sounding task of remote unlocking of the cars, are not quite where they should be yet. A key challenge, still unsolved, is who in the end carries the responsibility over the transaction. But a tremendous effort is taking place at the moment to work this out.

Meanwhile there’s a lot happening also in the hardware and service businesses. The car companies are readying themselves for the future by designing multiuser and multipurpose vehicles, while a formidable underbush of companies is developing to service the cars and the car users of tomorrow.

Microtransit, especially electric scooters, was the vogue last year and it has come to stay. To integrate their app-based approach to the larger mobility mesh is a challenge, but doable. We recently integrated the offering of Tier scooters to Whim and it was a gargantuan task. But now that it’s done, it definitely feels worth the effort.

The mass transit sector, both public and private, seems often slow to adapt to the changing world, but we must remember that it’s one thing to dump a bunch of scooters into a street corner, and very much another to mess with the transport habits of maybe millions of people.

All mass transit operators I know of are currently upgrading or planning to upgrade their backend systems for easier integration. You cannot have MaaS if you need a token to get onto a metro platform. Or you cannot dream of international roaming if every town relies on its own travel card. Among others, Cubic Transportation Systems is currently doing a wonderful job in making legacy systems compatible with the future.

Here in Helsinki, we’ve sometimes had a somewhat strained relationship with the local transportation authority, but the fact of the matter is that we have helped each other in becoming future-proof. MaaS Global and our Whim app have been a thorn on the local authority’s side pushing for open interfaces, and they have worked hard on making it possible for third parties to integrate to their services. We recognize that without their effort we could not exist in Helsinki.

And the same is happening all over. Sydney, Vancouver, London and Barcelona have made backend upgrades that pave the way to a whole new level of integration. In Switzerland they have Swiss Pass that opens just about any door to mobility. In Japan you can access all public transport with the Suica payment and verifications system. But my personal favorite is Antwerp, where, beginning in May this year, if you want to offer transportation service, you must prove that you are available in at least two independent services. If you give up your car, in return for your registration plates, the town subsidizes you mobility for a good while.

Roaming, the ability to access mobility services wherever you are has always been at the core of MaaS. Just like you can drive your car into another town or country and use the roads there, you must be able to access local mobility offering though your app. And here we come back to the iTunes analogy: the digital libraries of mobility must be in order and accessible for roaming to work.

A few years ago we built the MaaS Alliance to provide a roundtable for cities and organizations to discuss technical integration and standards. At that point we pretty much copied how the telecom industry had organized its international cooperation. Many have been skeptical of MaaS Alliance’s effort but, it has done an incredible job that is slowly coming to fruition. In the end roaming isn’t that complicated. All we need is standards and investments. And thanks to the heavy lifting by MaaS Alliance we are seeing plenty of both. I’m happy to note that one of the trailblazers in this regard has been the greater Helsinki region and our operator HSL. Their backend looks good and is ready to welcome MaaS operators.

Watching the work done through MaaS Alliance makes me confident that the big wheels are turning. Another indicator are all the calls I’m getting from legislators around the world. Recently I have talked to people from Canada, Korea, several EU members, Australia, and even the US. Everybody shares the same challenge: the legislation must allow freedom of mobility and plenty of modalities to consumers, but cannot let freedom get out of hand because in the end it’s the city that pays for the infrastructure and has to keep things in order. Different benchmarks on what’s the right amount of freedom and the right amount of investment are being tested. But these tests and decisions are not made alone: cities are communicating and networking like never before.

Mobility-as-a-Service has been a chicken and egg challenge and will be for a few years to come. Somebody, like MaaS Global has to show and test what’s possible. Without that there’s no push to evolve. But in the end it is the regulators and those responsible for the technical infrastructure that enable the coming revolution.

Now back to the music analogy one last time: for a long time digital music delivered over the Internet was seen as an enemy of good business. The whole industry (though never the consumer) went through what looked like a valley of death. But now, as the business models and technologies of streaming music have developed, and customers have gotten used to it, the whole music industry is coming roaring back.

Blog 2.4.2020

Into the Pandemic and Back

I’m not going to kid myself or you and say things are well, that we’re just working from home now and will be back into the old grind soon. No, MaaS Global is in the business of moving people around and when people are not moving, we are seeing our sales drop to a fraction of what they were. For any business this is the definition of a crisis, and for us too, although as a startup, its effects are different than they would be for an established business.

When the corona crisis hit, our first worry was the wellbeing of our staff, our clients and other stakeholders. We move fast and we travel a lot. Where had everyone been, who had they been in contact with? Where were those that needed to self-quarantine? And were they well? The next step was to empty the offices and send people home to work.

All this was done on a whim, after which we focused on our clients and the packages. In just two days after the crisis hit the awareness of folks in Helsinki, 1500 people had subscribed or converted to the package in our selection that is city bike and microbility focused. This enforced our thinking that in a crisis a mobility service like Whim could function as a fall back solution. Our customer service teams of course had to take seriously that fact that in a crisis some of our packages could not deliver all they promised, but even more than that we had to focus on our core promise of getting people where they wanted to go. We have already tweaked some of our packages to better meet the needs of the current situation and will keep refreshing them as the situation develops.

For a tech-savvy company often on the move, working from home was not difficult to organize technically. The mental part was tougher: even though we’ve been getting bigger every day, we are a close-knit team and we love working together in the same space when we can. Being miles apart for extended periods of time is not something we’d voluntarily do.

The social distancing has not led to depression though. Quite the contrary. As the head of the organization it has been exhilarating to watch how quickly the whole staff regrouped – remotely – around the new priorities at hand. Everybody knows that now our future relies more than ever on our ability to innovate, to meet current needs and seize long term opportunities. At a startup you do everything with full force, but within your constraints. When at MaaS Global we cannot focus on sales and iterate based on customer feedback, we have moved a lot of our effort into taking big steps beyond the current crisis. What we have in the works will certainly blow your socks off when the time comes to go public with it.

We are of course aware that this is also what we have to do. As a startup you are given a certain time span to prove yourself. In current circumstances we cannot prove ourselves through scaling our existing product, therefore we must use the time to develop something, that when it comes out, makes everyone say it was worth the wait.

As we look at the environment in which we are working on our new products I think a few things stand out. We’ve always known about the strong link between mobility and economic activity, but now we are getting real-life data on this like never before. Even in the era of teleconferencing, robots and digital services, when people stop moving, economies drive off a cliff.

Another thing that’s more clear than ever is the validity of the core promise of MaaS: multimodal mobility. The more options there are to move about, from public transport to taxis and rental services to healthy underbrush of micromobility, the more resilient the community and the society is. The central idea of MaaS is a promise that we will get you where you need to go, but how we get you there is not fixed. At a time of an emergency or a disruption, the need for alternative modalities and maybe new alternative packages is accentuated. 

As an engineer I must say that this is, despite its many terrible outcomes, also a hopeful era. What applies to MaaS Global, applies to many others: resources are being moved from sales into research and development while the world is experiencing never seen before challenges. Innovation will be on steroids for months to come. We will soon see unorthodox alliances, a flood of new products and services, and plenty of radical rethinking that would not have been possible at ordinary times. Currently our minds are blown by the pandemic, soon they will be blown by the new thinking it brought about.

Blog 4.3.2020

MaaS that Matters is MaaS that Scales

Whenever a new space develops, there’s usually a struggle to name it, and then a battle to define what it means. Just think of terms like service design, content marketing or circular economy. We may have accepted the terms but the consensus on what they mean is a shaky one at best.

MaaS, Mobility-as-a-Service, is living through the same thing. We are slowly settling on the name (and letting go of alternatives like Transportation-as-a-Service or Combined Mobility), but the fight for ownership is on. Since the space is hot, there are several differing, totally legitimate approaches on the market, but of course some snake oil and plenty of old with a new shiny label on it.

I don’t claim to own MaaS any more than the next guy, but since I was there when the concept was thought up and the term was coined, I thought I’d throw in my thoughts on what constitutes MaaS and especially MaaS we can believe in.

To me it has always been about the user. The driver is the change in consumer behavior made possible by technology. When an individual can get anywhere he or she needs to, anytime, anywhere, in ordinary life, without having to own a car, it’s MaaS. If all someone needs to get to is home, to work, to the supermarket and to their favorite cafe, and all these places are situated next to a busy tram line, then that tramline is MaaS for them. For most of us, our everyday needs are more varied and therefore the answer must be a combination of things.

By definition MaaS consists of two elements: mobility and service. Mobility is individually experienced freedom to move as you wish, where you wish and when you wish. Service means that you do not own the means of production, you get it from a service provider when and how you need it.

Therefore the discussion about technologies and payment structures, as important as it is, is beside the point if we are trying to define (or claim!) MaaS. The core of MaaS is the freedom of mobility without having to own a vehicle.

To deliver MaaS defined this way, we need several things, of which a service assistant and a pricing model are the most important. Without those, you don’t have MaaS. The assistant is one central place that answers all your mobility needs. Today it is usually an app, served by a platform connected to different modes of transportation. When, in 2006, I started to think about this, apps as we know them today did not exist, but as they emerged, along with smartphones, they solved a key challenge: freedom is freedom only if it is easy to exercise.

The pricing model is essential to perceived freedom. It guarantees that the users know that they can get anywhere in a geographically defined space, anytime during a defined time span. It is certainly the more challenging of the two essential components (assistant and pricing) but it probably is also the game changer: you get it right and the change in consumer behaviour is accelerated to a whole new level.

There are two more things that I don’t think define MaaS, but are essential to delivering it in a scalable, world-changing way. One is operators, the other is open ecosystem. By operators I don’t mean transportation providers themselves, but operators that connect to those transport operators. An easy comparison, that the idea of MaaS owes a whole lot to, are telecommunications operators. They guarantee that you have access to a network that works, wherever you are. Whether they own or maintain the network is secondary. What’s important is that there are several competing operators: that guarantees a sufficient and improving quality of the service.

The comparison to telecom operators is also a way to explain why transportation is not mobility. Transportation happens when it happens and the customers are supposed to catch it if they can. Mobility happens when and how the customer needs it, like a phone call or a Google search.

I believe that the only way operators can achieve the kind of service that delivers the required level of experienced freedom is, if there is an open ecosystem for transportation modalities. As I have blogged before, the traffic engineer in me understands that a single provider is probably the safest provider. But the service builder that I have become is aware that a planner is easily lured to a fallacy that the world will succumb to his brilliant models. In the real world, the required modalities are so many that no single provider, whether a public or a private silo, can provide the necessary service level. And even if they can locally, they cannot nationally or internationally, which is the promise many customers want. A change that scales is the only change that matters. And that, in the end, is the true measure of MaaS.

Blog 11.2.2020

Will Future Traffic Finance or Burden the Public Sector?

Is a car a necessity or a luxury? On the individual level the answer depends of course on where you live and what you drive. If we look at the same question from the societal point of view the car has elements of both. There’s a dichotomy: a well-functioning society moves, but the externalities are unbearable. Taxation of cars and driving often reflect this. Driving is not price-elastic: the price of cars and gasoline have second to none effect to how much people drive. So it looks very much like a necessity, something that should be taxed moderately. But since there is a strong case for limiting driving, cars and their usage is taxed in many countries as a luxury, or a vice, in other words heavily.

When we talk about MaaS and cars we tend to talk about climate change, congestion and family economy but we rarely talk about the national economy. If people give up their cars, what will happen to tax revenue? In Finland, the birthplace of MaaS Global, the government rakes in over 8 billion euros (2018) from taxes on road traffic (close to 15% of the revenue side of the budget). At the same time the public sectors spends roughly 3,3 billion euros on maintaining the infrastructure for all ground and water traffic in the country. Without taxes on traffic, the national budget would collapse. Cars and gas may not be as heavily taxed elsewhere, but the fiscal argument is an interesting one everywhere.

Currently MaaS looks like the most viable option to reduce the ever increasing carbon footprint of ground traffic. Electric cars alone will not do the job. If people simply trade their combustion engine cars to electric ones, the carbon footprint of building those cars will be huge, they still consume a lot of precious energy and the densely populated areas (where people increasingly live) will be even more congested than today.

There are several schools of thought regarding the future of MaaS. We, at MaaS global are pushing for an open ecosystem which we think is resource efficient and appeals to users. The city transport monopolies often push for walled gardens that they control. Then there is the idea that private ride-hailing companies should all have their own fleets (more congestion) and then battle it out in every city until one comes out on top and reaches a monopoly (private monopolies of necessities tend to become very expensive and very inefficient over time).

The technocrat in me – I’m a traffic planner by training – sees the logic in building a local MaaS service around the public transport offering that is already there. It’s efficient, easy to control and can lead to cost savings. But it may also lead into a fiscal catastrophe. All public transport is subsidised: from 20% in Amsterdam to 90% in some American cities. If we decide to move from transportation that makes money for the public sector to transportation that needs money to run, we must take the fiscal implications of that very seriously.

The MaaS ecosystem we believe in at Maas Global behaves differently. Our thinking is not based on what the engineer thinks is efficient but on how the public behaves. Just look at how people love their automobiles. This is not a rational world. People want choice, variety and a touch of luxury every now and then. And we should remember that only a clear minority, in many cases just 20% of the trips taken with private cars are commuting-related. People do not own cars to get to work, they own them to live the life they want. Varied needs like this are best met with a robust private sector offering that complements a well-run public sector backbone. This is a MaaS ecosystem I believe in.

Going back to my initial pondering on luxuries, necessities and taxes: as long as the private sector is involved in producing a variety of services to the end customer and as long as an element of fun and luxury is available, transportation is taxable. Taxes do not work well as incentives in the world of transportation, but they do work as a way to help to collect the revenue side of public budgets. Many of  the emerging transportation services must be so lucrative, that they can be taxed instead of having to be subsidized. The challenge is to build mobility that is not based on car ownership, not even an alternative to owning a car, but something that beats owning a car hands down. That’s when the real change will come. And that’s what’s needed to keep traffic economically sustainable.

Blog 27.11.2019

Fight for your Right to Modern Transportation

Why is it that the only carbon emissions we don’t seem to have any control over are those from transportation? Globally the only sector that has grown its CO₂ output since 1990 is transport (ground + air). It is now 25% of all of the world’s carbon emissions and will, if the current trend continues, be 40% by 2030. Most of this is road traffic, and majority of that is passenger cars. So, if we are to take IPCC’s 1,5 degree target seriously, we should focus on cars.

From where I am standing I’d say the challenges are the price of entry to the world of transportation, the power of incumbents and the toolbox of the authorities. Mobility is expensive: cars, car factories, roads, parking facilities and public transportation infrastructure don’t come cheap. Disrupting this is very different than moving news from paper to digital or banking from brick and mortar to web.

And it is not just about the money that is needed to enter these markets, it is about what incumbent car makers and transportation operators are afraid of losing: volume, market share and power. For the last century car companies have been a major supplier of wealth, work and taxes. Any serious decrease in cars sold will hurt them severely. Transportation operators are local power houses built over decades and tend to focus on holding onto their current market. Authorities, on the other hand, are good at detailed planning and tendering but not at having a vision and bending the world to it. The result is a world that sits in endless seminars, finds new things to research and avoids conflicts while carbon levels in the atmosphere keep on rising.

I see two things that must, and I believe will, happen simultaneously to break the deadlock. The first is that the leading cities of the world will start leading the world. The second is that we must become innovators in how to pass world-changing regulation.

We are currently experiencing a new era of city states. The world’s population is moving into cities, the cities are today’s sources of wealth and more governable than countries. In a globalized and digitalized world New York, Singapore, Barcelona and Helsinki have more in common than they have with many of their domestic counterparts. Leading cities will increase their cooperation, benchmarking and world-changing efforts despite of what happens on the country level. This development can be seen both as a remedy and a cause to the world’s ills, and is therefore often contested and raises endless prestige conflicts. The leading cities shouldn’t be seen as the only answer but they will be a vanguard leading us towards a smarter world.

Parallel to the cities’ joint efforts we need smart regulation. By this I mean regulation that redefines the roles of the cities and companies in them. Disruptive new companies should not be seen as enemies of the, often city-owned, transportation providers, but rather as companions in building the future. Also when systemic changes are attempted, and the old channels get stuck, it may be a smart move to try a different route.

In 2010 Finland was the first country in the world to introduce universal broadband service. This meant that everyone in Finland was entitled to a 1MB service for a moderate price and the telecommunications companies had to deliver that. This would benefit the customer and fast track the markets towards digital, but was not in the short term interest of the incumbent telecoms.

The lawmakers did not want to see the process being dragged down by the telecoms lawyers, and made an, at the time audacious claim that broadband was a subjective right of the citizens, comparable to human rights. The law was passed. Since 2010 the amount megabytes people are entitled to has risen, and what’s more important, the idea has been passed as a European directive and is an important stepping stone towards a digital single market.

Why not treat access to modern low emission transportation as a human right? Where there is a will, there must be a smart way.

Blog 11.11.2019

Why I Think BP Investment in MaaS Global Is a Good Thing

We’ve just finished another big investment round and brought in some exciting investors. One of them is BP. It is a fascinating strategic partner because of its network of service stations, its broad customer base and its experience in energy and logistics. Especially its presence in today’s traffic through the service station network maybe a unique opportunity when we are building a hub-based future of mobility.

Therefore I thought that I would share my thoughts on this particular investment in MaaS Global and my thoughts on sustainable investment in general. From the very beginning we have looked for funding from industrial investors, not from venture capitalists. The two main reasons for this are that we are in this for the long run and that we are building an ecosystem. We want investors that are not in the game to make a quick buck, but to build the future together with us. They have the resources and the interest to join in on multiple investment rounds. They believe in what we are doing and see a financial reward somewhere along the journey, but they are also in it for the journey. Our investors can feel tectonic plates shifting in the world of transportation and a stake in MaaS Global provides them with a ringside seat to the change as well as a place in the ring, a chance to be a part of the change.

We already have car manufacturers, bus operators, insurance companies and transport service providers as investors. They of course provide funds and advice, but at the same time they are all pieces in the very complicated puzzle we are assembling. When you are disrupting the real, physical world in something as big as mobility, you need a lot of friends and a lot of willing pieces to be connected in order to build something that challenges the status quo.

Investments from major players can of course be problematic. Many promising startups have been taken over by incumbents, not in the marketplace, but through first acquiring the startup and then shutting it down due to cultural differences or lack of patience. Many promising internal startups have also been initiated by corporations, only to be killed after a few hiccups and a change in the corporation’s management. These are recurring patterns that make it, for example, sometimes difficult for them to recruit or hold onto top startup talent.

We know this, and our investors know this. We are open about our policy of taking aboard strong, strategic owners, but not giving any investor a possibility to dictate what we do or turn us into anything we are not. MaaS Global will not become a daughter, we are the family table. This is hopefully a new, emerging start-up structure: we are an independent growth company with a broad industrial owner base.

Seen from our point of view, I believe there are strong arguments to welcome BP as an investor in MaaS Global but I think there is room for a more general discussion on what investing in sustainability and sustainable investments mean. If you are big enough and have been around for long enough, you usually have made a few bad choices along the way, and also choices, that once appeared right but in retrospect have contributed to something undesirable. Does money from companies like that turn the startup it invests in less sustainable?

It might, especially just to improve their sustainability image and keep doing the unwanted thing they are known for. But the other possibility is that it helps them to transform their business towards a more sustainable model. Everybody wins. Nobody wins if they have to stay in the business they are because they are not welcome to invest in change (and because, as we discussed earlier, internal startups rarely work).

So, another way to put this is to say that what the world needs is big, ambitious, world-changing investment opportunities. This is what will turn all the corporate responsibility polishing and greenwashing into real action and real impact. By building companies that challenged incumbents can invest in, we change the world. We do not do that by turning our backs to them and aiming at global disruption with money from friends and family. My prediction is that in 50 years the successful long-running enterprises will be the ones that, even if they had problems with sustainability issues, were determined about investing in alternative technologies. They can’t just shut down, they need investment opportunities.

They also need opportunities to belong to networks. The role of MaaS Global is to focus on the needs of modern consumers, build the best possible service for them and assemble a network that can fulfil their needs. One way to look at building a more sustainable future is that we already have the technologies and the pieces we need, but they just are not connected right. We need connectors. Building startups that attract industrial owners and give them an opportunity to contribute to massive, desirable change, may be one of the most sustainability-oriented initiatives you can take.

The world today offers opportunities like never before, and the need for solutions and investment opportunities is huge. If you have a world-changing idea, this is the best time ever. I’m really happy to work with BP.

Blog 6.9.2019

Scaling MaaS Requires Tweaking Reality

When you are scaling a company as a founder, some of the most important escalation happens in your head. You begin to understand that what you have set out to do is not only possible, but can be so much bigger than you thought. What was once a dream becomes an actual possibility. In parallel with this you begin to understand what it takes to seize the opportunity. The audacity, that is necessary at the start, must give away to humility before the gigantic effort that is needed.

After three years of captaining MaaS Global, I am now certain that what we are attempting is doable, and even more interesting than at the start. But I also know that it is going to take everything we’ve got and more to make it.

The need for MaaS is the same all over. There is a growing quest for an alternative to a private car that produces the same experienced freedom. And people do see that the buses are there; the trains, taxis and scooters and bikes are there, and that it does not take a huge hardware investment to start fixing the transportation challenge, but rather a holistic, smart user interface. And when they start picturing that this could be a globally roaming service, they are easily sold. So, we’ve got folks cheering, but they have no idea how hard it is to make MaaS happen. Expectation management becomes crucial.

The way I look at building MaaS Global is that we are simultaneously scaling on two axes and the magic is in synchronizing them. One axis is our own capabilities, mainly the technology we are developing, and the other axis is our partnerships, the cities and the operators that own and run the vehicles. Our tech should adapt to different environments but should also produce a uniform user experience. We should treat each partner as a unique relationship but be able to bundle their services into one. Synchronizing the outside speed (partners) and the inside speed (tech) is at the core of our challenge. To succeed in this, we, as the agile tech startup we are, must grow up to be a great customer care organization.

MaaS Global is different than most digital growth companies because we do not control our production and we operate in the physical world with real humans. It sounds charming when we are called the Netflix of transportation, but there is a big difference between us and them. They produce many of their shows themselves, we only produce the interface, not any of the services. MaaS Global is by no means in a dictating position. Recently we received a negative review for our new package, Whim Weekend, because a summer intern at a car rental company had not been briefed about the deal with us and the Whim user did not get what they wanted. This was once again a reminder that the last mile of what we do happens in the real world with real hardware and real people.

Nothing in this world was built for MaaS. In theory, Great Britain is great for MaaS, because aggregation is enforced by the law. In practice it is almost impossible because the law also says that every travel and price option must be shown to the customer. When our service Whim bundles a multi-modal trip, the whole idea is that it shows the best option, and does not jam a busy customer’s bandwidth with all possible combinations. In another European country our sales almost struck a fantastic partnership deal with a countrywide taxi app, but in the end realized that their otherwise fantastic service could not show location data. This would make it impossible to deliver the service level we are committed to.

Making MaaS work does not mean just tweaking the app. We must tweak the world too, the way our partners cooperate and the way business ecosystems are structured. That is of course difficult and when our partners, cities and operators, realize this, there is a temptation to build walled gardens and make exclusive deals. This does not serve true MaaS, a roamable, inclusive, efficient and global future for transportation.

The Winner-Takes-All business model, that most companies in Silicon Valley swear to, aims at monopoly, tying customers to exclusive deals that hinder innovation, limit services available and become costly in the long run. To keep MaaS moving in a direction that truly benefits the customers and the cities they live in, I suggest we all aim at making deals quickly, but stay away from exclusive contracts.

So if synchronizing partner processes and our technology is the core challenge, what about the cultural differences? Initially we thought that would need a lot of work and therefore built a diverse workforce in which over 20 nationalities are represented. It was a good move because it resulted in an enjoyable workplace, but what we have learned is that it is not so much the differences between nationalities than the differences between operators that take time to work out. The challenge is not opening offices in Singapore and The Netherlands. It is cutting through the  cultural differences between a bus operator, taxi company and scooter startup.

A somewhat funny detail is that all the countries where we have opened offices or that we have talked to, have described their cultures as particularly conservative. Every time I hear this it brings a small smile on my face and I think back to when the first automobiles were introduced in the 19th century. I wonder how many said then, ‘Of course this works in The US, they are so modern there, but here we like our horses too much to adapt.’

When there is clear and present urge from the public, it is not a question of if, but a question of when. The world of transportation is going through disruption that is technology-enabled but fundamentally demand-driven. Based on all the signals I see and hear, MaaS has moved onto the when stage.

Blog 2.8.2019

Cars Could Be The Circular Economy You Never Imagined

Cars are magical. And now I do not refer to the – often male – obsession with speed, contours, mechanics and power. I am referring to value creation. Just about all other modes of transport are practical investments: trains, buses, trams, trucks, electric scooters… but with a car you are not paying just for the output, getting from one place to another; you are paying to be who you want to be: how you want to feel and how you want to be seen. That’s the magic. A carmaker takes a heap of metal and plastics and turns it into a building block of a client’s identity.

We could of course go deeply into this, but for this blog’s purposes, let’s just take it at face value: cars are an ingredient of a modern identity. And now this is in flux. Urban congestion, climate change,and the sharing economy powered by digital platforms are all making people reconsider the blessings of owning a car. But this is just rumble before the real quake: when level-5, totally autonomous self-driving cars hit the streets, private automobile ownership willgo into free fall. How will the massive automobile industry, the symbol of modernism and progress, react to this?

If people do not own the cars, who will? Before we try to answer that, let’s look at how user behavior might change. If you don’t own the car you use, you might not choose the dullest option available – maybe you want to experiment a bit. And you will probably choose new over old. Roads will get a lot more interesting than they are today. Or, maybe the pendulum will swing into the opposite direction: since it is not yours, you stop caring what’s driving you around – it’s just a trip, who cares.

So, if I were an automaker, I’d be pondering the following questions night and day. Once people stop owning cars and start using them as a service:

1. Will they go for new and interesting, or will cars become a commodity?

2. Who’s going to own the cars: automakers or service providers?

3. What will be the role of service: will it become the differentiating factor and focus of innovation?

There are no sure-fire answers available, but I have a hunch about how it will play out. Carmakers will want to hold on to their margins, which are in the brand value of their products. If cars become a commodity, this value will be wiped out. As people will probably want to drive, or rather be driven, in new, comfortable and interesting cars, the automakers will compete with their brandattributes.

Since the carmakers’ business model is not any more to sell a new car and have the customer carry the burden of it getting old, they will start making cars that don’t age. They will decide to own the cars they make and build them so that they can be updated and upgraded forever. The scrapping business will almost disappear when cars stay on the road forever. Parts are changed as they age and features are added when new ones are thought of. This will be a circular economy like you’ve never seen before!

 The other option is that the service providers will own the cars. Then they set the requirements for the cars they want and the automakers will simply become factories pushing out white-label automobiles. This is possible but unlikely. Daimler, BMW or Toyota will not voluntarily become slaves to the service providers.

The concentration of vehicle ownership is something that regulators will love. Instead of there being hundreds of millions of car owners who all have an opinion on everylittle detail, there will be a dozen or two carmakers who own fleets that can be upgraded or tweaked at will. Or rather at the regulator’s will. Governments can impose restrictions, requirements and tax breaks that will have almost immediate effects.

And how does the developing Mobility-as-a-Service ecosystem fit into this? Perfectly well. Most people are already living in cities and their number is growing fast. In cities, public transportation, bikes, scooters and walking are pop. All the more so as it gets more crowded. Using a car to get around will be an exception, reserved for moving heavy stuff, going beyond city limits for a weekend or wanting to impress someone. Cars, probably owned by their makers, will be offered as part of comprehensive Mobility-as-a-Service packages. The day-to-day service to the customers will be handled by those concentrating on customer experience, not by those concentrating on manufacturing.

The way I see it, in the future the innovations and the value creation, as well as the customer, will be shared by the carmaker and the service provider. From that point, as an operator in the service layer, I wish the auto industry would work hard on the following issues.

1. Build close relationships with service providers, since they will be the single most important touchpoint to customers and their needs. Co-innovate.

2. Focus not on how many cars you manufacture, but on how many you have on the road.

3. It will not be the number of your cars, but the value of your cars that matters. By concentrating on the quantity you regress into the commodity game.

4. The most versatile automobiles get the most mileage. Can the same self-driving car be used for family entertainment, business meetings, focused intellectual work and also function as a delivery van?

To phrase it differently: If you can figure out the difference between a KIA and a Ferrari in the digital age, you’ll do just fine.

Blog 28.6.2019

The Real Lesson of Electric Scooters

I wonder if they had a version of a scooter moment in medieval towns? Did someone decide that the little tables and stands scattered all over, selling everything from pears to pig carcasses, were simply too much? They jammed sidewalks, caused health hazards, people walked into them, and when you needed one, you did not know where to find one that would suit your needs. Was there noise and aggression and vandalism?

And then someone suggested to collect all of the little stalls together for everyone’s convenience, and the market square was born. Consumers, merchants and the city were all happy. Problem solved.

The electric scooters came from nowhere. Or at least from the point of view of legislation they did. Practically overnight, in September 2017, the first E-scooters flooded the streets in the city of Santa Monica, California. Many loved them, some hated them. The operator, Bird, had no license for their activity and soon the city grew tired of complaints about blocked driveways and sidewalks. City officials warned them. Nothing happened. The city issued multiple citations but still, nothing happened. Finally, in early December, the city filed a criminal complaint against Bird Rides Inc. and eventually settled the case for $ 300,000 in fines and license fees. A pattern, familiar in the age of digital disruption, was once again enforced: execute, and ask for forgiveness later.

Cities are finding different ways to cope with the E-scooter tsunami. New York City first banned them but recently allowed them again; in British cities they are illegal due to the 1835 Highways Act; San Francisco chose to give permits only to smaller companies; Los Angeles allows bigger operators too but has imposed  MDS data sharing requirements; Paris has 12 operators on its streets but is forcing the number down to three; Antwerp is embracing them with open arms.

Dealing with E-scooters should not be seen as a challenge of its own but as a piece in a strategy puzzle. The next waves are already building up their strength: fleets of self-driving cars, swarms of delivery drones, armies of delivery robots on wheels, flocks of flying cars… To deal with them one by one, always behind in legislation and policy, will be a catastrophe.

With mobility, we are living in a new age that needs new strategies. One city I am watching closely is Hamburg. They are embracing hub-based thinking with their current 45 switchh points around the city. The points, multi-modal parking lots, are painted green for easy recognition and offer access both to the public transportation network and to a varied private offering of taxis, car share, bikes and E-scooters. In the future, all of the offering can be accessed through one app.

Visionary approaches like switchh make it relatively straightforward to deal with individual new introductions: ”So you got a new luggage carrying robot: this is where you can try it and these are the rules.”

Strategic and systemic thinking is, of course, hard when disruptive change is fast, and therefore the discussion often veers towards polarized stands on individual modes. ”Should we kick E-scooters out of our city?” ”When are we going to ban private cars with combustion engines?” Instead of engaging too deeply in these discussions, the cities should build visions of the future and learn to play both the long game and the short game at the same time and with great skill.

A city has a monopoly on planning infrastructure. The overarching vision, I think, should be to make it as flexible as possible but provide a framework in which operators and solutions compete in a fair environment. The competition between the world’s cities is fierce and it will only get more intense. In this game, one key element is the level and quality of innovation. Innovation, of course, happens in non-controlled environments like the early Internet, but also in environments where the framework and maybe the goals are set but the solutions stay open for competition. The latter suits established and complex environments like cities.

On a tactical, everyday level, much more is needed from city officials than before. Skills that are needed to run successful public procurements are very different from sustaining live markets. Instead of trying to organize everything, cities of today must become puppet masters that follow the markets and the solutions as they happen and see that all is fair and functions for the benefit of the inhabitants.

Each city is unique, with its architecture, its culture, and the solutions it has developed over decades or centuries. This one-of-a-kind character is often the city’s competitive edge, but it does not mean that a city should develop and own all of its new solutions. The competitiveness of solutions lies often in their scale. If a city wants the best, it cannot expect the leading companies to build unique concepts for each city. It must develop infrastructure that the most innovative and efficient players can connect to while developing and holding onto its unique character and vision.

The real lesson of E-scooters is that the cities with a vision have it much easier for themselves and their inhabitants, and that they stay competitive. Who wouldn’t want that?

Blog 29.5.2019

A Bridge Over Troubled Traffic

I still remember the day when I got it. The insight into why we as societies are practically incapable of doing the right thing to prevent climate catastrophe. This was in my former job as a traffic engineer, when our environmental manager sat me down and explained the relationship between political decision making and environmental impact.

He started by drawing a simple chart on a whiteboard. The vertical line represented the real environmental impact of decisions, the horizontal line the level of difficulty of decision-making. Then, starting from the meeting point of the lines (no decision, no impact) he started drawing a line exponentially curving up. The tougher the political challenge the more impact.

Then, to explain himself, he divided the chart into three vertical segments. The first one (easy decisions, very little impact) was built on techno-optimism: low-emission cars, electric cars, automated cars, etc. Politically this is easy: just let people buy new cars. The problem with this approach is that there is no evidence that it works. The emissions of today’s cars are half of that of the cars 25 years ago, yet the CO2 levels keep rising at crazy rates. How cars are powered is a piece in a puzzle but not the solution.

The next segment requires more guts from the decision makers but is still quite commonplace. Let’s do more of the good we are doing now: more public transport, more bike lanes, encourage people towards sustainable modality splits (walk more, bike more, ride public transport more). The reality of this approach is that it has not produced significant results anywhere, and the majority of the money still flows into building motorways. It brings incremental, but not drastic change.

Then there is the third way, and that is to heavily tax all transportation according to its emissions and prohibit the use of private cars at least in the cities. It would bring significant results fast, but taxes and prohibitions that seriously limit individual freedom are politically extremely difficult in most parts of the world. So the tough decisions are always pushed forward an election cycle or two.

Yet at the same time, deep inside, most people know the third way is the right way. It is not a question of opinion, faith or politics. It’s just a question of when. The sharpest minds in climate science say we have 11 years. Not to start doing something, but during which we must have made drastic changes, like cut CO2 emissions by 45 percent from 2010 levels by 2030, or come hell and high water.

I am all for individual freedom, and therefore partly understand why humanity will push itself to the cliff’s edge before tackling the tough decisions. What I do not understand is why we don’t even try to ease ourselves into stage three. The private car, as used today, is a big part of the climate challenge, and the opposition to drastically reducing their number in densely populated areas is coming from people who really like their cars and the idea of freedom of mobility. The multi-billion dollar car industry is also something that must be taken into account. Simply banning cars will not go down without a fight.

My belief is that MaaS can be a bridge between today’s idea of freedom of mobility and the inevitable severe cut to CO2 and small particle emissions. We could ease into the future by having alternatives that respect freedom but are ready for a world in which emissions will be taxed like never before. This would not be as bad for the auto industry as a total ban. People would still have access to great cars when they absolutely want to drive them.

The willingness to take the MaaS route varies according to the generation you are talking to. And this is a detail that makes me optimistic. Take almost any group of 20-year-olds in any modern city, and they are usually not looking forward to owning a car like previous generations. They want to get to places and do not mind driving if needed, but to own an automobile is not a goal.

To cause a little generational friction, which often helps to get a conversation going, I am tempted to say that the real obstacle toward MaaS are the gentlemen in their 50s who are so used to getting around in a nice car of their own that they cannot fathom any other future. They – or we, I belong to the same demographic – hold the future hostage and are not willing to make the lifestyle adjustments and political changes that cutting emissions requires.

But, while there is some truth to this, it is a cheap shot. Not all middle-aged men are alike. One-third of our customers are past 45 and there is a small, interesting spike in males in their 50s. I could not help but laugh and yell ”Yes!” when I was looking at our customer reviews a while ago and spotted a five-star review from a gentleman well into his 50s who had previously been dedicated to Bavarian driving machines but had recently discovered Whim Unlimited and was wondering why on earth he had not switched to it before.

Another, quite different moment came in Abu Dhabi. When I give speeches I often ask audiences if the car they own is their dream car. The point of this question is that, according to several studies, the allure of a new car fades in about a month. So almost everyone is driving around in a car that does not excite him or her. But if you get a MaaS subscription with rental option, you get to test and enjoy different makes and models. Well, in Abu Dhabi my tactic backfired. Most of the gentlemen present raised their hands and smiled widely. Quite a few of them, I learned, had not just one, but five dream cars.

So, we may not be landing in Abu Dhabi any time soon, but I will keep asking my question. So far it has worked everywhere else.

Blog 26.4.2019

Attacks and Answers about MaaS

Since Mobility as a Service (MaaS) evolves and gets onto the radar of more and more people, a lot of questions arise. We get them on the street, in conferences and, of course, through digital channels. Some are inquisitive, some are aggressive, some are outright attacks. All of them are important. I thought that I’d take a few rounds with some of the claims that, on the surface, appear quarrelsome or combative but are actually very good ones and help to clarify what MaaS is and what it isn’t.

1. MaaS operators will push folks to use taxis and rental cars because they get fatter commissions from that than from public transport, bikes, and other green options.

This is not the idea of MaaS, but it is a danger. It will happen if MaaS operators are only allowed to act as digital kiosks and their only revenue comes from commissions. If, however, MaaS operators are given flexibility in pricing and room to innovate, then the market mechanism will start pushing usage into another direction. When a MaaS operator charges a monthly fee and knows how many kilometers a user travels in a month, it has a very strong incentive to direct as much of the travel as possible towards public transport, biking and walking. This is actually the MaaS business model at its purest: the difference between the monthly fee and the price of trips taken is the gross profit, not the commissions from trips.

2. MaaS operators want to own their customers and this will commoditize all transport service providers. They will lose their brands and become bulk.

If you are bulk to begin with, you will stay bulk. But if you have a service and a brand people like, a MaaS operator is dependent on you. A MaaS operator sells value and that means using service providers people appreciate. The customer is co-owned. A true MaaS operator should not be involved in providing the services, because if it is, it has an incentive to push what it has, not the brands people like. Exclusive deals are not a good idea in MaaS. Offering choice, optimizing for efficiency, and letting people enjoy the brands they like as part of the package, is.

3. MaaS is a threat to public transport because the monthly package includes car-based options that are more desirable to use.

Yes, MaaS might kill some of the last mile, fixed-route public transport. But all the data we have supports the idea that arterial transport will rely on public transport. MaaS should actually help to move masses from motorways to mass transit. However, in many cases, when someone who is used to driving around in a private car wakes up to MaaS, the modal split (how much each mode of transit is used) will lean towards taxis and rental cars in the beginning, until this person becomes familiar with the efficiency of good public transport.

4. MaaS strips traffic planners of their power and hands it to the market.

Quite the contrary, I’d say. The dominance of the automobile, highways, multi-lane streets and parking issues have restricted the city and traffic planners’ freedom. In the age of MaaS, they will have much better information on how people move than ever before. Once they are no longer thinking in terms of lanes, they can plan hub-based cities. This opens a variety of new options. MaaS also gives planners a set of new tools to execute active traffic policy, with big data on actual usage, and incentives and tax policies based on modality splits.

5. In a platform economy you must own your customer and customer experience and you should not hand it over to a company like MaaS Global.

First, let’s look at this from customers’ point of view. Do they want to have 20–30 different mobility apps with their credit card information on their phones? Do they want to construct their trips themselves? Some of them may, but not that many of us are transportation geeks. We just want to get where we are going, and therefore a one-stop shop for all mobility needs makes much more sense. The future belongs to ecosystems, APIs and shared customers. The old platform-economy mantra about owning your customer is dead. The sooner you get over it, the better you are equipped to live in the present.

6. A MaaS operator is trying to build a business on commissions, but there’s not enough money to go around.

When you buy a car, the price is not the compounded price of its parts plus commission. It is the promise that comes with the car, the feel, the brand. The sales price reflects the experienced value to the customer. The same is true with a well constructed MaaS service. We design and put together a desirable package and charge for the delight it brings our customers. When we buy the parts that go into the package they have their own, production-based price mechanisms. Think of Netflix. You are paying monthly for your viewing pleasure, and that price has very little to do with the actual production costs of the content. This is how a sound subscription-based business works.

7. Left on its own, every market develops towards a monopoly, and so will Mobility as a Service.

People who say this don’t see the size of things. If you are in the social media business, you play with pennies per customer and you can try to dominate that field. Transportation is very physical, very political and very big. The cost of capital to dominate transportation globally is just unimaginable. You cannot raise that much. The idea that proud nations and cities would let some single company dominate their roads, streets, rails, and airspace is also not credible. It will not happen.

Or, a version of it might happen, locally, before it unbundles again. Disruption does not automatically deliver the desired results. There will be operators that want to take over a whole city or a country, or some cities might be tempted to solve the mess they are in by handing the business over to one operator. But monopolies come and go.

If you are a decision maker you should not, – and I don’t think you can -, stop disruption from happening, but you absolutely should regulate the disruption towards the common good: in this case, a functioning market with enough actors and focused on the users.

8. The only way to get a MaaS market up and functioning is to drop all regulation.

This is the Silicon Valley mantra we hear sometimes: regulation kills innovation. What these guys often don’t say as loudly is that they are trying to blitzscale to get to monopoly. As I said in my previous answer, I don’t believe that in transportation, monopolies are desirable or, in most cases, even possible. Nor do I believe in rivalry between individuality and community. A city is about both. A MaaS operator should do everything it can to cooperate with mass transit and vice versa. Clinging to monopolies or ideologies in the very practical world of transportation is seldom constructive.

9. MaaS operators are communists in startup clothing. They want to take away my car.

”I want my car! I want to keep my stuff in it. I want to drive my kids around! Don’t you dare touch my car!” Yeah, there are those folks, and as someone running a MaaS company, they are not in my focus. You want to keep your car? Keep it. A MaaS operator is there to serve the 38% of the population (according to a recent study by Kantar) that is seeking a way to give up the car.

10. MaaS might be an answer to city folks, but it will never reach small towns or the countryside.

Well, the automobile did. 3G mobile telecommunications networks did, and so did 4G. City dwellers might get the services first but once you’ve switched over to MaaS you want to reach every corner of the world with it. In most places MaaS is a viable answer, the modal split will just vary. While metros, buses and trams rule in the cities, in small towns it might be shuttle buses and taxis.

Blog 8.4.2019

Why Freedom of Mobility Is at the Center of Dealing With the Climate Crisis

The single biggest driver of change in transportation in the coming years will undoubtedly be the impending climate catastrophe. One of the core questions, probably the core question, as this change takes place, is: what will replace the privately owned automobile? Is it virtual reality (VR) and we all stay home? Is it a congested public transportation system enforced by law? Is it multiple fleets of autonomous cars jamming up the streets? Or is it the kind of Mobility as a Service (MaaS) that optimizes low-emission transportation while giving individuals freedom of choice?

I know I am partial here but, hey, that’s why I have chosen to do what I do. I also know that in order to do my job well, I need cold, hard facts.

We have just released a bunch of those in a study called Whimpact: Insights from the World’s First Mobility as a Service Solution we conducted together with consulting engineering giant Ramboll. Helsinki is the world’s most developed MaaS city. For the first time, we now have real-life annual data on how people use MaaS and how that compares to the overall usage of transportation modes in a particular city. The key findings are:

1. ”Public transportation is the backbone of MaaS.”

2. ”Whim users are steeped in multimodalism and use both bicycle and taxi to solve the last-mile problem.”

3. ”Growth in MaaS usage has been strongest in the inner-city region.”

So, the first numbers are in and it looks like MaaS, when done right, does exactly what we expect it to do: it relies on mass transit (not automobiles), solves the last-mile problem (that automobiles used to solve) and is most popular in dense areas (where automobiles pose the biggest challenge).

It may be fashionable to throw around the idea of electric robot cars taking over and fixing both the CO2 crisis and the urban transportation challenge, but that is not sustainable.

Let’s stop and imagine the moment when autonomous cars will be fit to serve us. The first company drops a fleet of 500 cars into a city. Since there’s no wage cost, the price of a ride is reasonable, close to a bus ticket. People love the service. And as we have seen with private cars, it’s not wisdom that prevails, but freedom. The fleet grows according to demand and not until long, the amount of automobiles on the streets has more than doubled (there’s research on this). Think of any modern city and then, in your mind, double the amount of automobiles on the street. Gridlock. The whole city ceases to function.

Therefore, we do not want people to use autonomous cars instead of public transport; we want folks to use them in addition to public transport. The business case and the positive environmental impact of smart MaaS are based on people using more public transportation than before, not less.

Public transport, walking and biking are the desired substitutes for private automobiles, but not the automatic ones. We choose them if they are the most convenient and pleasant choice available. But we will not choose them if traffic planners and municipal traffic operators are going to force us into using public transport by limiting our options. Many of us will rather sit and swear in traffic jams instead.

This is where things can go amazingly well or awfully wrong. Recently my colleague Krista Huhtala-Jenks was in Brussels to receive, on behalf of MaaS Global, The Future Unicorn Award, which is given to a European company on its way to becoming a tech giant. The attention was, of course, a cause for joy in our team, but I must admit, it made me feel a little uneasy. European authorities were rewarding us for our efforts in MaaS, while at the same time there is a real and present danger that Europe will mess this one up.

Mobility is the second-biggest sector of economic activity in the world after real estate, and it is entering a hurricane of change. Europe, with its walkable cities and dedication to public transportation, stands to be at the forefront of positive change. But that is not going to happen if every public transport operator in every city tries to go it alone, which is all too often the case.

At MaaS Global, we are frequently asked by European cities to license our software as a white-label solution just for them. We have chosen to not get into these talks because single cities should not see themselves as disruptors and then… well, stall disruption.

Instead of building walled gardens around their service, they can build application programming interfaces (APIs) and make themselves attractive to as many added service providers as possible. Instead of solving for a city, they can be part of a worldwide solution. Instead of running out of money and expertise against fierce international competition, they can oversee that whatever happens is for the benefit of their citizens. Instead of building an entry-level mobile interface to their otherwise compelling services, they can connect to existing world-class applications.

Instead of digging in behind a local monopoly they can be part of a global solution, for cities and for the planet; the one that makes people ditch their cars because they have found something better. Something that gives them more freedom than before – not less.

Blog 14.2.2019

Why Cities Should Call the Shots in the Mobility Revolution

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.

Blog 3.1.2019

 To Happen, Change Must Be Desirable

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:

Fight trusts and monopolies fiercely and in all forms, old and new.

Focus on maximizing the decision making power of the customer.

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.

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.

Blog 25.10.2018

Highways to Hell

The investments in telecommunications infrastructure are three times the size of transport infrastructure investments, while people spend ten times more money on transportation than on telecommunications. How crazy is that?

You might think that this is because telecommunications has been and still is going through a massive disruption due to digitalization and mobility. While there is certainly truth to that, I’d like to argue that a bigger reason is the direct connection between the usage of communications devices and services and the infrastructure that enables it. If people come, they build it.

Ok, building infrastructure for vehicles in the physical realm is complicated and takes time. It is also often financed with public funds and therefore priorities must be set through public debate.

But to get a point across, a comparison to telecommunication is worthwhile. Before the mobile revolution, the price of a long-distance phone call was often the result of a political debate, not a function of demand or investment. This is still how decisions on transportation infrastructure, especially road capacity, are often made.

As in all political bargaining, some of the decisions are made to score points or include horse trading to get something entirely different through the system. True consumer interest or national interest might be lost. The expert calculations that feed the public debate are relatively simple. Since the ‘50s the transport capacity has been a function of GNP. The richer we get, the more roads we need. There is a logic to this, but it is also perverse the same way owning a car is. A car is expensive to buy and maintain, but it sits unused most of the time. The same with roads and lanes. They are built for the peak hours and therefore are barely used for most of their lifetime.

At a time of disruption, politics and calculations reflecting old paradigms can be calamitous. If infrastructure investments – with a life expectancy of at least 50 years – are still based on the idea that everyone who can afford a car will get one, and that the width and amount of roads are a linear function of GDP, we might be building highways to hell.

In greater Helsinki we have roughly 600,000 cars when just 30,000 could do if used optimally. When I say optimally I’m unashamedly blowing my own horn. If people, instead of owning and using a private car, shared transportation resources through a service like Whim, that would make multi-modal mobility (combining cars, buses, trains, trams, scooters, bikes etc.) easy. If the use of transport infrastructure was more intelligently distributed throughout the day and the week, we would save tons of money, time and carbon footprint.

To put it more bluntly: at a time when most climate scientists think we have to take a drastic u-turn in our carbon emissions now, committing to 50-year investments that make things worse borders on criminal behaviour. We are stalling disruption and smart investment at a time when we should accelerate it.

So, what would a direct connection with usage of and investment in transport mean?? What would bold infrastructure undertakings look like?

When I fly, a fee for the airport infrastructure is a component of my ticket and if my flight is overbooked or seriously late I get a compensation. There’s a direct connection between the demand (my money) and the infrastructure I use and the service I get. With a service layer like Whim app, developed on top of the modes of traffic, current and new, we are hopefully headed the same way in all of our mobility.

As said, current projections for the future are mostly based on cars and GNP. What if we changed that and started simulating models in which people don’t choose to own a car. What’s the optimal fleet of self-driving cars in a city with a good public transport system? How about simulating a web of urban hubs that have to connect with buses, metros, trams and 10 car shares, 3 bike shares, 5 scooter shares and a swarm of drones bringing and taking goods?

It is hard. The future always is. Therefore, a professor friend told me, the only money currently available for transportation research is for those that extrapolate the current curve. But a different future is closing in on us and we are reaching a point when we just have to make the best of the assumptions and the understanding we have right now and start building infrastructure with new settings.

The future means building new towns and retrofitting old towns to accommodate hub-based multi-modal traffic. We are entering a period of disruption and therefore everything we do should be as modular as possible, enabling change and improvement as things develop. We should also maximize connectivity to all existing modes of traffic and try to leave an opening for an interface to those we have not thought of yet.

An interesting detail is that while the Americans might have a hard time giving up their cars, their cities, built around automobiles, are spacious in a way that might allow these new approaches relatively easily. European city dwellers, on the other hand, might be willing to ditch their cars or have done so already, but fitting all the new modes of transportation into an old city is a major challenge. Disruption may threaten jobs in many industries, but not so in transportation infrastructure. We have to rethink, redesign and rebuild most of it.

Blog 21.9.2019

Sewer City or a Web of Beautiful Hubs – City Planning In the Age of MaaS

There was a time when only a tiny fraction of the population owned cars. But so loud was the hum of progress echoing from combustion engines, so seductive the promise of freedom brought about by the car that soon the world started to organize itself around the automobile. Cities that were once planned around commerce or community or to celebrate emperors, to impress visitors or to fend off enemies, were now planned to welcome as many cars as possible.

And what do you need when everyone has a car and everyone needs to get to and from work at the same time? You need lanes, lots of lanes, big lanes, to all directions, throughout the country.

The excitement for the age of the automobile saw one of its peaks at the Futurama exhibition at the New York World’s Fair in 1939. A huge scale model of a future landscape set in 1960 featured vast suburbs and industrial areas, electric-powered farming and majestic cities with streamlined skyscrapers. Everything was, of course, connected with multi-lane motorways. ”Highway engineering at its most spectacular”, ran the tag line.

For the nation recovering from The Great Depression, this vision of ”A greater and better world”, dreamt up and executed by theatrical and industrial designer Norman Bel Geddes, was exhilarating. The General Motors sponsored exhibition became the main attraction of the fair.

People started buying into this dream, not just in the US but all over the developed world. Cities were organized and connected to suburbs and to each other according to principles familiar from Futurama. Although the high-point of this thinking may already have passed, a lot of the city planning principles remain the same today: suburbs that sprawl, cities that shoot up in the sky and lanes, lots of lanes. And many of today’s mobility inventions, Uber, Lyft and the self-driving cars to come, follow the car-centric thinking of the last 80 years.

Just to be clear, I do not have an issue with cars as such nor does MaaS Global, we are just challenging the wisdom of owning a car or adding more of them to our roads.

To illustrate, let’s jump from Futurama, the daydream of the ‘30s, and think roughly 20 years ahead from today. What would the world look like in 2040 if freedom of movement did not mean cars owned by individuals, but a pleasant transition from one place to another?

To be able to imagine this we must shift from lane-based thinking (the root of modern traffic planning is in waste treatment engineering) to hub-based thinking. And while we do that, we must also broaden our focus from efficiency engineering to efficiency benefits of aesthetics.

The future of mobility, as I see it, belongs to services that combine different forms of transportation, also cars. For this world to work, transitions from one mode to another, from tram to taxi, from train to underground, from Hyperloop to a flying car, must be made as pleasant as possible. The time you spend transferring from one mode to another must be your own – not a claustrophobic, scary, wet, cold and grey ordeal. So there must be hubs, a lot of hubs, and they must be visually pleasing, like piazzas in an ancient city. A general principle in traffic planning is that people are usually willing to walk up to 500 meters to get to public transport, but an Italian study shows that if the stroll is through a beautiful and interesting neighbourhood, folks are willing to walk several times that. Add the aesthetics factor, and the city planning parameters change completely.

This, I expect, is the most radical change in city planning to come. In the age of the automobile, the focus, when designing for humans, was the interior of a car. It should be luxurious, pleasantly functional, enjoyable down to the smell and the carefully tuned sound of the engine. A place to spend time in. The design principle of what was on the outside was efficiency: roads, streets, intersections, garages and parking spots had to be cheap, fast and safe – but not beautiful.

What if this changes? What does it mean that a hub or a walk to another hub is designed to be as nice and inviting as a good car interior? So well, that people choose to walk through a few fantastic hubs rather than sit in a private car?

We can continue our mind game as far as we want. What if, by the year 2040, there are radically fewer cars parked at the street side and this space can be used for commerce and recreation? What if parking lots turn into markets or sports courts?

But this is not just an aesthete’s daydream; it is a recipe for competitive edge in a fierce fight between the world’s cities. When they compete for cutting edge workforce, creativity and investment, which one do you think has the upper hand, the web of beautiful hubs or the sewer city? Why do you think people are moving to Vancouver, not to Detroit?

This, I must admit, is one of my biggest drivers to push MaaS and MaaS based thinking. I dream of walking the streets, around 2040, in one of the places we have been active in, with my kids, maybe grandkids, enjoying how wonderful these towns turned out to be.

Blog 27.8.2018

What Will Replace the Private Car?

The biggest question in the world of transportation at the moment is: ‘What is the solution that will seriously rival and eventually replace the private car?” The extreme and the obvious – and therefore quite uninteresting – answers are:

1) nothing ever will or

2) public transport, of course.

These answers are shallow and lazy takes on a complex and fascinating world of mobility that is more psychology than engineering, more existential struggle than economics.

I like to think that we, the ones trying to crack this question in disruptive, yet constructive ways, are working on a field of dreams. What I mean is that rational arguments carry only so far, while the real challenge is to appeal to feelings.

Why do people spend 85% of their personal transport budget on a car, when they only use it for 29% of their travels? The answer is not that they are unaware of the discrepancy, and if they only were educated, the problem (the inefficiency, the ecological burden, urban congestion) would go away. The answer is that they want to keep the dream alive. The dream of getting anywhere, anytime, with friends or family. It is about the idea of freedom. People pay to get around, but also for the possibility to get around even when they don’t.

So, how do you cater to that dream? If freedom is what people want, then forcing them into a one-size-fits-all solution does not stand a chance in a free society. Public transport is great and a vital component of any future mobility solution in crowded areas, but it should not be something forced upon people by the authorities. It should be a choice, part of an offering that makes people feel free.

When people are asked what it would take to make them give up their cars, the answer – almost in unison – is: ”If someone could promise that I could get wherever I wanted, whenever I wanted to.” It is a little bit like AirBnB and Uber. Their success is due to them being able to provide the trust factor, not just the convenience factor where it did not exist before.

So the answer, the magic sauce, is reliability. In the world of transport people want freedom and someone has to guarantee it to them. At MaaS Global we look at this challenge as the three steps of magic:

1) We have to provide all desired mobility options as a one-stop shop,

2) We have to offer roaming so that our service works anywhere in the world,

3) We have to fix any hiccup that may occur: if the bus does not come, we’ll get  a taxi, if that fails a car share, if that fails an Uber – and if nothing else works we’ll get you there in a friggin’ helicopter (actually, sorry, we cannot do helicopters just yet, but you get the point).

”Yeah, that makes sense”, I keep hearing when I lecture on this, but then people add, ”but it would never work here. Here (…fill in the blank) we just love our cars too much.” Often these doubters are gentlemen well into their 50s who are failing to see the quiet revolution taking place. Among the young, the car is not what it used to be. The percentage of kids that decide to get a driver’s license is down everywhere. In Great Britain in the 1990s, 80% of people were driving by 30. Now that number is down to only 45% . In Stockholm, of the kids that reach driving age, only 9% get a license. This trend is clear even in the United States, although not as dramatic.

So, the cool new thing among young consumers is not to drive. And that is going to give a massive boost to services which replace the private car. Plus, right around the corner awaits another game changer: automated vehicles will start doing the driving for them. This does not and should not mean that they would start buying automated cars or use only those (the congestion problem would only get worse), but as a component in an overall solution, self-driving cars will push prices down and free up space that is currently being used for parking.

When the freedom factor is established and prices start to drop, there is very little that can stop the big wave. Rethinking traffic this way, not just as an engineering problem but as a psychological sea change, will bring savings and opportunities that are beyond anything we have seen so far regarding digitalization.

Right now, those that care to listen, can hear the rumble before the quake.

Blog 16.7.2018

How To Regulate Through the Coming Traffic Tsunami

Whenever it becomes clear to everyone involved that the business they are in is being disrupted, what used to be an organized world turns into uncertain terrain – even chaos. Some trust their size, some are paralyzed with fear, some believe in their speed, some try to use their wits. Heroes are born and fallen, fortunes made and lost. The market is a foggy mess – until one day, things start clearing and we see the new order. Now, blessed with hindsight, we can debate what got us here.

With traffic we are reaching the point of chaos around the corner. Growth of cities, promise of autonomous traffic and growth of the sharing economy all contribute to a revolution that is escalating rapidly. All it takes is for a taxi operator to dump a fleet of self-driving cars into a major city and we enter a whole new era. Yes, it offers fascinating new opportunities, but it may end up being a major mess.

A recent OECD study paints two very different futures depending on how autonomous cars are introduced to our cities. A shared mobility simulation done in Lisbon, Portugal estimates that if autonomous rides are shared, a high-capacity public transport system complements the overall system and we could do with just 10% of the cars we have today. On the other hand, if autonomous cars are used by a single passenger at a time and there’s no high-volume public transport, at peak hours car-kilometers travelled will increase by 103%, which is not manageable.

There is already empirical evidence of similar development from the introduction of Uber to New York City. Streets are packed with Uber, Lyft and Juno cars looking for passengers and, as a result, midtown traffic now moves almost two miles per hour slower than just two years ago.

If the easy answer to getting from A to B is with a manned or autonomous car, using the Uber app, on your phone, you are going to use it. People go for easy, even if it means that the system as a whole becomes dysfunctional.

Although we at MaaS Global are working towards a much smoother future, I see system failure as a very real threat. There are two main reasons for this: (1) the monopolistic and therefore defensive behavior of big traffic operators, and (2) regulators who choose the wrong tools or think they have time to sit back and wait for the storm to blow over. In other words, we should not blame disruptive technologies for the possible mess around the corner, but our inability to react to them in a way that would serve the public good.

Let’s start with the folks needing to get around. What do they want from the new digital mobility services? In all the research we have done and run across, the overwhelming majority wants three things:

They want all the different forms of traffic behind one app;

They want to be able to choose the app they use (no monopolies);

They want to use the same app wherever they are.

To achieve a world the consumers want and one that would not be congested, public transport must be an integral part of the solution, but it cannot be the sole solution. Just like the self-driving cars will be pieces of the puzzle, but not the whole puzzle.

And now we come back to the two potential black clouds on the horizon: current incumbents and regulators.

Many big operators, often current or former government or municipal monopolies, have a hard time accommodating to the age of open platforms and access. Yes, they may welcome other actors behind their own app, but they are not willing to open their services to others. From the customer’s point of view this is a total failure. These local operators are not available when people travel, and they tend to build packages centered  around their services, not around customer needs. They end up losing customers, and customers end up losing the opportunity to use their services. That’s not how you serve the public.

Regulation is often considered a bad word in the world of innovation and digital disruption. Yes, it may suffocate innovation, as some say is happening in old industries like pharmaceuticals, but it can also create a level playing field for progress, as it has done in the mobile communication industry in the Nordic region. The reason Nokia and Ericsson got off to an amazing start in the mobile networks and handsets business was due to common standards like NMT and GSM induced by regulators. Finns are currently enjoying the most bandwidth for the lowest prices in Europe from their telecommunications companies due to regulation that enhances fair competition.

Possibly the worst scenario, and unfortunately sometimes the current state of affairs, is a state or municipal traffic operator that teams up with regulators and tries to force people to use public transportation that is falling behind by making life difficult for everyone else. This is a clear and present danger in Europe. If the public transport systems fail to develop along with the sharing services and autonomous traffic and open up their services for the public to use as they see best, all progress will happen elsewhere and these once valued, and still vital transport systems will deteriorate until they will be shut down as dysfunctional.

The alternative is to create, through innovative regulation, a level playing field that has the benefit of the customers at the centre. In this thinking, no single form of transportation or single operator is the solution, but they are all components in a solution.

As an American venture capitalist recently said to me: “All big problems that a single technology or a company can solve, have already been solved. All major future improvements demand collaboration and to achieve that, we need political leadership.”

Blog 11.6.2018

The business model of Mobility as a Service (MaaS)

As an eager young traffic engineering student, one of the first things I learned in my introductory courses was that when it comes to getting around, the consumer is far from rational. A city dweller could easily hire a cab every time her destination is outside of walking distance and still end up significantly richer than her neighbour who insists of driving around in his own car. Or, if a computer, a math machine, had transportation needs, it would very seldom choose to own a car. Yet, we people love cars.

When you’re trying to solve the ever-growing challenges of transportation in cities – the congestion, the pollution, the cost and safety issues –, what you are actually trying to crack is not a logistics challenge, but the complicated geography of human desires, fears and habits related to traffic.
And, as if this equation wasn’t challenging enough, we must remember that the roots of city traffic planning lie with water and sewage management, not with the concepts of freedom and self-expression. If your idea of looking into the human psyche is through what we can learn from sewage management, you have some serious issues, or at least the wrong toolbox.

What seems like an impossible equation is where the amazing opportunity of MaaS, or Mobility as a Service, presents itself. It is ever slower, more expensive and more annoying to own and drive a car in a modern city. From the point of view of resource allocation it’s plain crazy: if you own a car, 85% of your transportation cost are due to the ownership. In Tokyo, more than half of the cars are used less than once a week. In the greater Helsinki region, the home of Whim, there are maybe 600,000 private cars. If organized optimally, just 30,000 vehicles would do.
Imagine that instead of owning a car and dealing with all the hassle that comes with it, you could just download an app that takes care of all your transportation needs. And imagine that this app could, in addition to getting you around, create the same feelings of freedom, social status, joy and safety as a private car.

Now, stop imagining and discover Whim.

MaaS Global and its service, the Whim app, are often mistakenly thought of as just another digital marketplace, aggregating the information on what’s out there and then displaying the findings according to the user’s wishes. This is how you find hotels, restaurants and plane tickets. But this is not Whim.

We are old-fashioned in the sense that we buy the parts, then package and brand them to meet our customers needs, and then charge for the value we create to the customer. In practice this means buying bus, tram, taxi and bike rides and car rentals beforehand based on our knowledge on how much and how people like to move in a month. Then we assemble these rides into packages that meet different demand profiles and focus on creating an experience that beats owning a car. Our business is in putting these packages together and selling them for profit.

It’s a little bit like assembling a car. A car is not its parts, nor is its price the cumulative cost of those parts. When a person buys a car, she buys it for the benefits she gets and pays accordingly.

But this is as far as the manufacturing analogy goes. We may be traditional in our packaging thinking, but our business model goes far beyond what’s currently thought of as a platform business. We like to think that we are a platform 2.0 company. This means that we are not shooting for a monopoly but rather believe in open access to transportation services and open access protocols to our services and others’ services. We also believe that our customers own their data – we don’t. And more than anything we believe that the stronger the ecosystem of different actors with open APIs is, the better the service to the client, and the better everyone fares.

Traditional carmakers have been great at creating an experience of value. If you really must own a car, you could easily do with one that costs 20.000 € or less, yet quite a few opt for cars that cost more than 40.000 € and the sky is the limit. One of the most desirable cars at the moment, a Tesla Model S, will set you back 120,000 € or so. When people buy cars, they do not think what it costs them, they think about the perceived value it brings.

What does this mean for MaaS Global? When we assemble our products, we know that in Helsinki, an average resident makes four trips a day, that the length of the trips usually varies between 2 and 30 kilometres, and that the daily travel time is 90 minutes. But when we package our products, we look at two things: first, the desirability and therefore the willingness to pay for our service must rank right next to owning a car; secondly, we must be able to influence how different modes of transportation are used within the service. When we get these two factors right, we’re selling for more than we’re buying, and when we do that in great quantities, we are profitable.

To make all of this work, we must understand that we are in the operator business. We need considerable volumes to achieve success and to get there we subsidize our offering in the beginning. If you look at how much an average user is worth to Facebook, it’s around 30 cents a month, while a mobile phone or a broadband user may be paying somewhere around 30 euros a month for the operator’s service. However, if you own a car, you are paying somewhere around 500 € every month. That’s the price point that makes building a Mobility as a Service operator such a lucrative idea. MaaS is massive beyond anything we’ve experienced in digital services so far.

The only thing I can see being even bigger is living. Why not, one day, buy accommodation as a service? Not from a smorgasbord for temporary needs like AirBnB, but as a long-term solution tailored to your lif And then, on top of that, opt in for a mobility service. Now we are talking about people buying services for maybe 1,000–2,000 € a month. It seems worth keeping an eye on this space, no?