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Cities need to foster public activism in urban mobility
minutes de lecture
minute de lecture
Urban mobility ecosystem is becoming more and more complex, with technology and innovation often going against cities’ public interests. While new mobility solutions (ride-hailing, car-pooling, free-floating vehicles, etc.) are proliferating in all major cities, congestion is still on the rise (+15 to 20pts in travel time between 2008 and 2016 in Paris, Berlin, London and Brussels, according to BCG’s analysis of Tom Tom Traffic Index). The reason for that: a lack of complementarity between mass transit and on-demand mobility solutions. But Mobility-as-a-Service (or MaaS) could soon reshuffle the cards.
“Mobility-as-a-Service” is usually defined as a digital platform supporting end-to-end commuter journey - from planning to payment and ticketing - across all modes of transportation. Commuters’ adoption is expected to be extremely rapid since they increasingly expect convenient and efficient interaction with the mobility ecosystem whereas it is becoming more and more complex given the growing number of options available. If 76% of Ile-de-France residents aged 25-45 have tried free-floating mobility solutions, only 6% use them in their commute, according to the September issue of the BCG Baromètre Mobilité, in partnership with My Little Paris’ Urban Lab.
On the other hand, cities see MaaS as a lever to improve the integration of mass transit and on-demand solutions, and to ultimately lower personal car usage, congestion and pollution.
MaaS has thus become a gold rush for private players: they are in the starting blocks to develop their solution as quickly as possible, to protect their access to end-users and become inescapable… for competitors.
Comprehensive solutions are yet to come: most of existing MaaS platforms remain at the all-inclusive travel pass caricature. They aggregate mobility solutions from different operators, resell unitary tickets to commuters, and charge commissions to operators. The Helsinki-based Whim app is the international reference for MaaS: users can subscribe to a monthly unlimited mobility plan, giving them access to all transportation modes. Even if price point (500€/month) is well above Pass Navigo’s (€75/month), the offer remains attractive for car owners looking for credible alternatives for their daily trips.
However, for MaaS players, economic model remains a struggle. It is sustainable only if users favor cheap transportation modes (e.g., mass transit, bikes), but the all-inclusive pricing strategy often drives them towards ride-hailing and taxi services.
In order to reach sustainable economic models, MaaS players must put in place incentives to encourage commuters to use economical transportation modes. Public authorities are the only ones who can centralize transportation subsidies, tax personal vehicles, enforce such incentives, and therefore enable sustainable economic models for MaaS players. Moreover, public authorities should see MaaS as a tool to foster public activism in mobility, and to help them reach their objectives:
- Environmental objectives: to drive users towards green modes and to lower personal car usage
- Economic objectives: to spread traffic across peak and off hours, and to optimize infrastructure utilization
- Societal objectives: to make urban mobility more inclusive
If technology already exists, operating model remains a question mark. Public authorities must take on this challenge before technology giants transform it in a winner takes all B2C battle. Authorities must reinvent public-private collaboration models, orchestrate rather than delegate, and define precisely what is expected from private players.
Joël Hazan – Partner & Managing Director at BCG; BCG Henderson Institute (BHI) fellow
Hind El Abassi Chraibi – consultant
- Science & Technology
- Tech Startups
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