The MaaS Monetization Matrix by Iomob
A recent report from Juniper Research projecting $405 million in revenues for the MaaS industry in 2020, exploding to $52 billion by 2027 is only going to further increase interest from a range of travel and transport players to explore deploying MaaS solutions in the coming years. Moovit´s recent nearly $1 billion exit via Intel is also generating a lot of interest in the industry helping to validate the potential for growth in the industry.
As an enterprise Mobility as a Service (MaaS) software company working with transit authorities, rail operators and other transport and travel players, we at Iomob receive questions from clients on a regular basis regarding how can they profit from deploying a MaaS platform. While early players like Citymapper and MaaS Global (AKA Whim) have yet to show massive revenue growth, they certainly have shaped the discussion and brought integrated journey planning and seamless multimodal MaaS to the forefront of discussion in terms of how digital transformation in mobility will reshape how we move around cities and regions in the future. An extra wild card these days of course is Covid-19 and how it is going to (re)shape mobility patterns, user behavior related to mass transit, changes in types of services available and of course, how MaaS will unfold in a Post-Covid-19 world.
In light of the above, we felt it was time for Iomob to share with the mobility ecosystem, our insights as to the range of emerging and future revenue models we are witnessing or discussing with clients and partners around the globe. Here is our MaaS Mobilization Matrix v1.0 released today May 11th, 2020. I am certain in the coming years this will evolve substantially as the ecosystem evolves, the technology matures and new innovative revenue models are explored.
1.Subscription model: Our friends at MaaS Global are widely recognized as a first mover in the MaaS industry and have been rewarded with early brand recognition and healthy funding rounds, most recently nearly $30 million euros from global players such as BP Ventures and Mitsubishi Corporation. MaaS Global has been pushing the envelope with a subscription model including a range of entry level monthly subscriptions ranging up to an “all you can eat” monthly subscription allowing users to leverage a range of public and private services in a metropolitan region for a fixed monthly fee.
A key assumption baked into this model is that people will be willing to forego car ownership in lieu of a monthly service plan equivalent to the cost of a lease or car loan. This revenue model seeks to embrace nudge theory by finding ways to accelerate the transtion from car dependence towards mobility access. This model has many challenges including convincing public transit authorities and private operators to support deep integration and aggregation and to offer volume discounts. Naturally this model also assumes a critical mass of users will adopt the model and the data analytics platform of the MaaS operator will be sufficient to ensure profitability based on projected volumes of use by different user types. A recently published study suggests that under certain circumstances a large percentage of the population would be interested in MaaS with subscription. But one major condition is that those surveyed expect a discount of 36% over normal rates!
2. Commissions from Transactions: To date this seems to be the dominant revenue model chosen by B2B2C MaaS startups and enterprise transport operators who are launching MaaS platforms. The upside to this is that it requires less behavioural change, and in the case of legacy operators with millions of installed users, the 2 or multi-sided marketplace challenges startups have when trying to build a marketplace are less concerning. In fact in some cases, operators can insert a MaaS SDK into their existing transportation apps which already have millions of daily users. One challenge faced by this model is that many of the operators of urban mobility services have very narrow margins and are resistant to pay significant commission rates. With scale, however, smaller commissions could still result in profitiability.
3. Value add to Core Services: In many cases, legacy travel and transport operators do not have expectations to profit directly from the investment in deploying MaaS. Instead, rail, public transit , regional bus operators or airlines are viewing MaaS as a way to solve first and last mile challenges for users trying to navigate the growing fragmentation of the mobility marketplace. The idea is not just to improve the user experience by supporting door-to-door journeys but also to increase the likelihood users will book the core services of the legacy operators by making it easier to manage the whole process. It is of course difficult to measure the role MaaS has in growing revenues from core services but some of the legacy operators we speak with are optimistic this will be the outcome.
We believe Covid-19 adds an additional element to this logic. Legacy rail, bus and transit operators are faced with a major challenge to get people to feel comfortable traveling in these forms of “mass” transit as it is very difficult to maintain minimal levels of social distance. We believe MaaS with social distance features can accelerate a return to adoption of these services by first incorporating information about crowd levels of different mass transit vehicles, but also, and importantly, incorporating filtered results for first and last mile to these important backbones of mobility. We are in talks with a major national rail operator to help them deploy a type of “virtual seat” for trains that normally operate as hop on and hop off without reservations to better manage the flow of users and combine that with an aggregated control of passengers in major stations where multiple lines pass. By combining new sources of data or controls of passenger volumes in these vehicles, with a filtered group of other public and private services that are adhering to social distance standards, customers of legacy operators using MaaS with social distance will have reduced anxiety about their entire journey.
4.Premium MaaS: While we are not aware of any current MaaS deployments in the world that follow this model, we have had conversations with clients about exploring it. This would likely work best with legacy transport and travel operators who have a critical mass of installed users. Here commissions would be charged over the top of the base price of the public and private operators connected to MaaS. The question is why would someone pay more for a mobility service through MaaS than they would by booking the service directly? First of all, our own user research has validated something we all know, people hate to have to discover, download and onboard new apps and then to navigate them all to find the best way to go from A to B. Furthermore, in Premium MaaS we believe operators will add some bells and whistles to the experience such as: access to VIP waiting areas, premium seating, guaranteed door-to-door arrival even if one of the selected services is late or fails in some regard, etc. An additional benefit for business travelers is more seamless tracking of urban and regional travel expenses for billing their companies or clients.
5.MaaS SuperApp: Super apps have been all the rage for many years in Asia such as WeChat and AliPay who have nearly a billion users and offer a one-stop shop for a range of chat, retail and travel services. Some of these super apps are already getting in the game of mobility by, for example, offering access to book taxis and ridehailing services inside their apps. Coming from the other direction, some legacy transportation operators are now exploring leveraging MaaS to create a super app as well. Take an airline for example (once users start returning to airlines). Many of them have been looking to expand the stickiness of their apps and to accompany their passengers once they land with features such as booking hotels or transfers. Another level of seamless journey experience for airline customers is to offer ground mobility including dynamic journeys in their destinations (or to arrive to their departure airport). By doing so, the MaaS enhanced app could support daily movements and be paired with discovery and booking of restaurants, tourist activities and more. With this model the legacy operator may or may not be interested in monetizing mobility transactions, but will certainly want a piece of the other bookings ontop of the core MaaS experience.
6.Corporate MaaS: This is an entirely different use case. In Corporate MaaS, a larger company with employees spread around various cities and needing to travel to various cities as well, can offer a white label internal MaaS solution to their employees. This can allow companies to offer mobility budgets for nudging staff towards more sustainable mobility choices, carbon tracking for measuring the contribution of mobility towards their carbon footprint and improved expense tracking of urban and regional mobility of their employees. This also can save money by shifting from owned and managed corporate fleets towards the use of interconnected mobility services. Again, during the extended Covid-19 pandemic, we also believe the social distance features are very useful to ensure safer journeys of employees as they return to work.
It really is early days in the evolution of Mobility as a Service in Europe and across the globe. Covid-19 has introduced some new challenges and opportunities for the mobility ecosystem and the MaaS market but we believe the future is bright for MaaS and we expect to see a range of business models and experiments to play out in the coming years and do not believe this is a one size fits all. Different players have different objectives, and different building blocks to leverage, as they seek their own approach to seamless multimodal MaaS for citizens, visitors and employees. Stay tuned!
Iomob, which stands for the Internet of Mobility, headquartered in Barcelona, Spain, has built a white label Mobility as a Service solution which combines proprietary algorithms enabling multimodal combinations of public and private services and an SDK that allows end users to discover mobility services, receive multimodal combinations for their journeys, book and pay for a range of mobility services via our client’s own apps. Iomob has won numerous open innovation challenge awards from organisations like Ford Motors, Renfe and Sweden’s Sustainable Mobility Challenge. Iomob has also participated in prestigious startup accelerators such as Techstars and Wayra and in 2020 won the TravelTech Europe startup first prize (London), 2019 Best Mobility Startup of 2019 at the South Summit, The Public Choice Award from ERTICO in 2019, Top Mobility Startup in the Federation of International Automobiles (FiA) Startup Challenge and selected Top 100 Smart Cities Partners by Newsweek.
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