The second biggest part of consumer spending is on transport, about 14 per cent, just behind housing. Fourteen per cent of consumer spending is approximately £100 billion per year or more.
The 'Future of Mobility' is identified as one of the four grand challenges in the Industrial Strategy (November 2017). It also identifies leadership in low carbon transport as a shared priority with this challenge and confirms government investment in innovation to develop clean technologies across road, rail, aviation and maritime transport.
Acknowledging that the UK is on the cusp of a profound change in how people, goods and services move around towns, cities and countryside and that 'Mobility as a Service' (MaaS) is challenging existing assumptions about travel, the strategy identifies four early priorities:
- a flexible regulatory framework to encourage new transport modes and business models, including for autonomous vehicles (AVs);
- addressing the challenges of moving from hydrocarbon to zero emission vehicles including a strategy on government support for the transition;
- preparation for a future of new mobility services, increased autonomy, journey sharing and a blurring of the distinctions between private and public transport, including issuing a 'Future of Urban Mobility strategy' in 2018; and
- exploring ways to use data to accelerate the development of new mobility services and enable the more effective operation of our transport system.
The Parliamentary Transport Committee ran an inquiry into MaaS earlier this year taking evidence and hearing from transport operators and local authorities. The oral evidence sessions have now concluded and a report is in preparation.
As the Committee's chair noted, integrated MaaS is a much talked about concept, but it is not yet generally well understood. So it seems like a good time to try and take a look at what is MaaS and consider the evidence being presented for its transformative potential in the Transport Sector.
What is Mobility as a Service?
Traditionally mobility has been provided by managing fleets of vehicles around networks, framed by strategic transport planning objectives.
MaaS turns this back to front and looks at framing mobility systems around customer preferences. It is therefore a consumer centric transport - or rather mobility - 'as a service' model. MaaS is the service (the method of delivery of which may and is very likely to vary) which matches a mobility solution (including public and private) to an individual consumer's need.
MaaS is a concept solution with multiple possibilities for practical implementation. Indeed the possibilities for implementation have yet to be determined. Areas and cities, it may be anticipated, will create localised MaaS solutions that work with the transportation assets and private-sector partners available.
It is also possible to envision both static and dynamic MaaS models which could take into account, for example, congestion, air quality, user characteristics and speed. It is even possible to imagine opportunities where the data coming out of the MaaS models is ultimately used to deliver transport outcomes in a 'better' way for example aligned to governmental policy objectives.
In summary therefore the MaaS concept is this; that the supply side of transportation, in other words the transport operators in terms of planning, booking, ticketing and payment are integrated with the demand side ie the travellers as one product via a single platform (also sometimes referred to as 'total transport' or integrated MaaS'). The example of an app is a way of understanding what MaaS might look like, but the concept is wider than that, at its core it is about creating an underlying system infrastructure - and regulation - that may be accessed in many different ways.
Could Maas offer an alternative business model?
The possibility for MaaS to offer an alternative business model lies in its potential ability to improve the traveller's experience including by providing a personalised service, flexible payment, easy transactions and dynamic journey management and planning – some advocates of MaaS go as far as to suggest that if the value proposition is right it may rival that of the car and facilitate a shift away from car ownership.
It is now generally accepted that MaaS is already happening, will continue to happen and that one of its key components will be AVs; coinciding with the 2017 Budget the Chancellor announced that the UK would launch self-driving cars on British roads by 2021. MaaS type services already exist and people are already using them; these services are associated with navigation, journey information, cashless payments and managed access to transport services including bus, rail and shared journeys.
Government involvement in the evolution of MaaS is seen as important in helping to ensure that any eventual MaaS system is a more efficient system that also has the potential to align with societal, environmental and governmental policy outcomes, for example, avoiding undesirable unintended consequences. One example cited by the Transport Committee Inquiry is the 70 per cent increase over a very short space of time in the number of private hire vehicles in London (including Uber), with the attendant potential to increase congestion and pollution.
Barriers and potential policy interventions to support MaaS growth?
The Transport Committee inquiry's terms of reference include 'overcoming the barriers to implementation' and the 'role of central government'.
While the Committee will publish its report in due course it was interesting to see what evidence was provided to the Committee. The belief held by committee witnesses is that without policy intervention MaaS growth will be constrained and a number of barriers were cited:
- ability for consumers to switch between MaaS providers
- right to service quality from the MaaS provider
- ability to address potential future market failures
- interoperability between the data provider and other stakeholders
- appetite from transport operators to adjust their business model
- ability to provide the data requirements of the MaaS provider.
MaaS has the potential to have a significant impact on both travel patterns and on the business models of existing transport operators. Policy makers may need to consider how to optimise the effectiveness of any interventions to achieve the right outcomes.
One outcome scenario is where MaaS providers offer consumers a service focused only on car vehicle transport eg taxi, carshare and rideshare. Another outcome is a scenario where consumers are offered a fully multi-modal service that involves the use of passenger service vehicles, and other traditional public transport modes, as well as the services offered in the 'car focus' scenario.
Progress on AVs and charge points
There is evidence of some shift in attitudes to car ownership; younger people (also most likely to adopt new mobility models) are increasingly deciding to not own cars. Population growth forecasts may be expected to exacerbate congestion in the future.
One of MaaS' key components will be AVs (likely to be electric vehicles (EVs)). We consider the bigger picture and the anticipated uptake of the new technology in our briefing which can be accessed here.
The Automated and Electric Vehicles Act 2018 received Royal Assent on 19 July 2018. It contains powers that allow government to bring forward regulations in relation to (if it deems necessary) AVs, EVs and smart charging points. The impact assessment acknowledges that the market-driven solutions would be preferable, but government has given itself the powers to intervene in future. It has thereby provided a clear early signal to the market of its vision for EV infrastructure.
The revised National Planning Policy Framework (NPPF) that came into force on 24 July 2018 now includes new wording that requires "the need to ensure an adequate provision of spaces for charging plug-in and other ultra-low emission vehicles." to be taken into account by local planning authorities when setting local parking standards (paragraph 105). And further paragraph 10 requires that applications for new development should "be designed to enable charging of plug-in and other ultra-low emission vehicles in safe, accessible and convenient locations."
What is coming next?
A number of trends are driving and fuelling the MaaS concept, including consumer expectations. There is a growing expectation that experiences in transport are to be delivered as a 'service' with an increasing focus on whole journey experience and experience of transport interchanges.
Another big driver is technology change and the pace of change. Processing power and the ubiquitous use of mobile phones and the opening up of transport datasets has already given rise to a range of personalised apps designed to serve travellers, deliver information in real-time to help avoid congestion and delays and enable the customer to choose a travel option according to the specific travel need.
Combining big data with new autonomous transport systems will create opportunities to innovate and refine MaaS offerings. It is therefore perhaps unsurprising that government and transport authorities are now investigating how new technology platforms may help to manage these trends.
It is likely that a set off standards for the global mobility system will emerge in the medium term. With the evolution of new modes of transport like AVs and drones, the existing essentially regulatory created categories will be challenged. A bus is a category created by regulation. With the speed of technological evolution there is nothing to say that for example in the future there will be things called buses in the form of 60-seater vehicles and that they will run in a different way from something called private hire.
It is also perhaps likely that places that have combined authorities and mayors (and therefore have transport powers) will drive ahead of those places that do not.
The government's Industrial Strategy promised a new policy for, and regulation of, flexible and on demand transport. In the immediate term we may expect a report and recommendations from the Transport Committee perhaps towards the end of 2018. The MaaS Alliance is also currently drafting a 'Bill of Rights for the MaaS user'. This is likely to be ready in September 2018 and it will describe how passenger rights are defined in the multi-modal context.
The Law Commission is also currently undertaking a far-reaching three year project (begun in March 2018) to review the UK’s legal framework for road based AVs. It will be considering a wide variety of areas of law, from road traffic legislation to product liability. The Commission will also look at the use of AVs as part of modern public transport networks and on-demand passenger services. In its first year the project will include an audit of the current law and a scoping exercise to identify key issues; it aims to publish a scoping paper for consultation before the end of 2018.
Flexible on-demand transport is a current policy and regulatory gap that government is investigating how to fill. It is an inevitability that incumbents will be challenged and all that operate in the transport sector may like keep an eye on the developments.