Heidi Auvinen

Senior Scientist VTT Technical Research Centre of Finland Ltd

Transport and mobility in the platform economy: anticipating wide transformations

In this article, the author focuses on transport and mobility, a sector that is already being shaken by the first platform businesses and where even wider transformations are anticipated in the near future.

Information and communication technologies (ICTs), vehicle innovations and evolving user preferences are changing the way we perceive, express and fulfill our mobility needs. The platform economy serves as one framework to better understand these changes in terms of emerging business models, technological solutions and networked interactions, where platform thinking plays a central role.

From incremental innovations to systemic change

As is the case with many other sectors, new opportunities with ICTs are the key enabler in gearing transport systems up towards platform economy. Positioning systems, smart phones and automation already add value in the existing means and modes of transport, e.g. navigation systems, mobile apps for ticketing or parking assist systems. But a more radical transition may lay ahead, as the traditional technologies, business models and behavioral patterns are confronted by the emerging concept of Mobility as a Service (MaaS). Multimodal trip chains in daily mobility as well as seamlessly interoperable international travel could soon all be accessible from mobility platforms. While the somewhat controversial Uber might be the poster child of the transformation accelerating in the transport sector, it is only one of the very first building blocks of the envisioned MaaS future.

Owning a car no longer a necessity

To put it simply, the MaaS concept envisions all transport and mobility needs of any user to be met by a comprehensive solution, where access to all transport modes and services makes it unnecessary to own your personal car. Instead, you would have timely door-to-door mobility service at hand, providing you with the most convenient trip chain solution. Imagine the Netflix of transport, and you’re on track of what the first MaaS providers like the Finnish Whim have in mind. In fact, Finland is the pioneer in MaaS concept development, which shows not only in the number of forerunner initiatives and experiments but also in the public sector ambitions to enable and support progress in the area. There is strong will to discover the MaaS opportunities, and one concrete example is the on-going process to bring all regulation on transport markets under one act, the Transport Code, which aims to promote new service models. MaaS thinking is strong also in Sweden, where one of the earliest experiment UbiGo took place in 2014 and the service has been announced to re-launch shortly.

Benefits for all: users, companies and society

But why is there such hype around the topic? Perhaps because there seems to be something in it for everyone. From the user perspective, MaaS is the big opportunity to improve access to affordable and top-quality mobility and solve many of the everyday travel headaches such as being stuck in a traffic jam or stressing about finding a parking place. The expected benefits of MaaS include improvements in e.g. (1) congestion and traffic flows, (2) energy usage and environmental impacts, (3) access and availability of mobility and (4) health and quality of life. These of course translate from the individual user perspective to wider societal benefits with significant economic and environmental efficiencies. Although many of us are more or less stuck in our old ways and rely on our cars, the recent trends show that people are growingly open towards new alternatives such as leasing or renting and the interest to get one’s driving license, especially in cities, is decreasing. You could actually think of MaaS as the mechanism bridging private and public transport more closely together but also blurring the line between the two as new complementary mobility concepts such as ride-sourcing take off.

Transport industries in turn are facing the ultimate “opportunity or threat” situation, where the incumbent and the entrants have to take the decision to either embrace or ignore the MaaS hype and platform thinking. Examples of those willing to take the opportunity range from traditional car manufacturers to innovative app developers, and technology development is fast. One hot topic is automation, as driverless vehicles are gradually entering the roads, and these pilot-stage service innovations may soon be mainstream platform business. The most recent step forward is the piloting of self-driving buses in Finland in the real traffic environment.

Finns lead the way

The modest Finns are actually the leading MaaS innovators, building momentum by a united front of MaaS visionaries and spokesmen, service and application developers, authorities and legislators, etc. Several programmes for research and development, pilots and demonstrations are on-going, and learnings from these are swiftly approaching real markets. The Finnish legacy of mobile phone business combined to ICT and engineering competences provides the perfect foundation for success and for once it seems that the Finnish are not holding back but boldly preparing to shake and shape the global landscape and markets. And a country previously characterized as an island may also in practical terms become even better connected to other Europe as flight routes could soon compete with a hyperloop connection to Sweden and a rail tunnel to Estonia.

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