Everything You Need to Know About Mobility-As-A-Service.

Introduction

Mobility is the new term and like the sharing economy, it’s here to stay. There’s a transformation in the mobility sector, maybe even a revolution.

A revolution led by e-mobility, autonomous driving and connected cars resulting in changing customer preferences. In this revolution, a new ecosystem for personal mobility is being created and shaped.

mobility as a service

This ecosystem will not only affect automakers and third-party mobility service providers but also other industries related to mobility such as mobility management players, payment processors, local authorities and so on.

However, mobility is definitely not a stand-alone industry as it requires cooperation from multiple emerging technologies.

But what led to the rise of usership and the end of ownership in mobility? What or rather who is driving this trend? How big is the mobility industry anyway in the sharing economy? And more importantly, what does it mean for people, companies and organizations directly or indirectly related to it?

These are some of the questions answered in this blog.

What is Mobility as a Service

Mobility-as-a-Service (MaaS) is a concept that represents a shift from personally owned modes of mobility towards mobility provided as a service. MaaS puts users at the core of the transport services.

MaaS is reshaping how we get around. Wikipedia tells us that the concept first arose in Sweden with a trial monthly subscription model and gained popularity at the World Congress on Intelligent Transport System 2015 in Bordeaux.

Does it really matter who coined the term? We’ll let you decide for yourself. What matters is what it means to live in an era where owning a car or a mode of transportation is no longer a ‘’must have’’.

MaaS is a service promise. Even more precisely, it is an access promise.

A promise to access mobility in various forms and ways.

For example, customers who still want full-time access to a mobility service and flexibility to change or ‘pause’ their usage (car, bike moped) are flocking towards mobility subscription services who often bundle a vehicle, insurance, maintenance and other costs in exchange for a monthly fee.

This kicks long-term leasing arrangements and personal contracts out of the door.

Customer who want mobility on a go and want to pay for usage only, often find on-demand mobility as the optimum solution. And if there is a third set of customer who wants mobility in a different form, MaaS promises to do that.

How Big Is Maas as an Industry?

How Big Is MaaS as an Industry?

1 trillion by 2030

Well, it’s big. No, wait it’s enormous. No no, it’s humongous. Okay, it’s gigantuous (so big that the word doesn’t even exist in the traditional dictionary).

Well, to put a number to it, the mobility ecosystem is expected to grow over 1 trillion by 2030 according to a report by KPMG.

(That’s just 9 years from now. That’s not too far, is it?).

what is mobility as a service

Furthermore according to a report by Statista the bike-sharing service market (another transformational mobility service) alone is expected to account for 13.8 billion euros.

But what do random numbers mean anyway unless you understand the underlying connecting dots?

What Led to the Rise of This Concept?

Keywords

  • Customers demand for flexibility
  • Advancement in technology
  • Shift to urban cities

Customers Demand for Flexibility

Customer preferences towards flexibility, service availability and perceived higher economic benefit is what’s fueling this fire. Mobility in the 20th century meant owning a car or maybe 2 or maybe even 3.

In the 21st century, it somewhat means the same, though there is an uprising.

Take a look at your parents and your grandparents household. Do they own a car or maybe multiple modes of “mobility’’? (maybe your uncle owns a unicycle)

Though a necessity our ‘’owned modes of mobility’’ have plagued our roads with urban traffic and our earth with a  heavy environmental footprint.

But the younger generations think differently and by the younger generation, I mean millennials: people born between 1981 and 1996.

This generation, though dragged down by not one but two ‘’once-in-a-lifetime’’ economic crises, still represents the highest-spending potential in 2020.

To them owning a car is no longer a lifestyle choice.

The younger generation just wants to get from point A to point B and then to point C. They want connectivity, accessibility and affordability and at the same time minimize accidents, pollution and road congestion.

Mobility as a service promises to make that possible as the next best alternative to owning a car is subscribing to a car as a service.

‘I can’t buy that but I want to subscribe to that’ calls for a mind shift among service providers.

Advancement in Technology

An additional contributing factor is advancement in technology. Especially evolution of payment processing infrastructure, which, has made it easier for the customer to click select and buy.

Oh sorry, we mean rent or subscribe or access.

Shift to Urban Cities

As more and more people shift to urban jungles their appetite for ownership decreases.

And why wouldn’t it? We want everything faster and better. Access to mobility is important for us but can we say the same for owning a car?

According to a study by Cox Automotive, all generation groups want the same thing.  Even though car ownership still dominates the automotive landscape (for now) according to the same study 55% percent of Generation Z, 45% of millennials and 28% of baby boomers feel that owning a car is not sooooooo important.

One can argue that there are such numbers spread all across the internet and it does not necessarily mean much. Well think again and look around you. Ask your friends how they feel about owning a car.

What (Who) Is Driving the Trend?

Keywords

  • Tech savvy customers
  • Increasing cost associated with vehicle ownership
  • War for talent
  • The new age of startup founders

Tech Savvy Customer

The urban customer is tech-savvy (the cooler generation). This generation is leading the way towards pay-per-use mobility. We (me being the member of the cooler generation) want transparency and want to make our voice heard.

If we are not satisfied with your product, we will tell you with the hope that you will improve your product and provide us with a better service. This makes us feel valued and enhances our user experience.

Customers (hello millennials) are at the centre now and intend to stay there for the foreseeable future. Hell, we’ve even put them there for our own benefit.

The customer is the king (or the queen, gender equality we know) and as a result, we have new terms like user-centric experience, customer-first product-later, customer-centric approach and so on.

But is the demand homogenous among all age groups? According to a report by McKinsey, it’s not.

While the young (cooler generation) do prefer access over ownership, this mindset may shift as soon as they think about starting a family. Starting a family means stability and so does owning a car. (at least for now)

Millienials want shared mobility but as they start a family they want more stability. Can your business model adapt to this need?

This shift calls for revisiting the big question, ‘’Who is our customer?’’ If you ask me, I would take a diplomatic approach and say ‘’it depends’’. If you ask me “on what?” I would say ‘’what chain of beliefs your business is trying to establish’’.

Increasing Cost Associated With Vehicle Ownership

Moreover, when it comes to private customers the need for flexibility in mobility and increasing cost of ownership is shifting focus from ownership of mobility products to usership of mobility services.

Customers perceive owning a vehicle as an endless money draining pool.

War for Talent

Another thing to consider is the “war for talent”. Companies in some markets are making availability of cars an integral part of their employee marketing campaigns.  

But there’s another factor.

Shared mobility, another term associated with the MaaS concept, is shifting and will continue to shift ownership from private customers to fleet operators.

Such fleet operators serve as suppliers to companies who want the best of the best and are willing to add more benefits to their employee packages.

The New Age of Startup Founders

Most start-up owners also belong to the cool (millennial) generation and hence think differently. They want to make Mobility as a Servive available.

Maybe this makes us revisit the question - what came first: the chicken or the egg? The chicken being service providers starting the trend of mobility as a service and the egg being customers demanding for a more flexible way of mobility.

Yet again, it doesn’t matter, because

IT IS HERE NOW!

Are We Only Talking About Cars?

No, we are not. It’s not just about cars anymore. It’s about bikes, scooters, e-bikes, e-scooters, normal scooters and basically anything with a wheel that gets you from here to there (might even be a unicycle).

A 15 year old wants an e-scooter. When he is 19, he wants a bike for university. The same person wants a car subscription when he is 26 and starting a new job and wants to shift to an owned car when he thinks about starting a family at 30.

The same customer may wish to have different types of mobility services throughout his life.

What Is the Motivation to Rent?

It varies from one customer to another. Some want hassle-free mobility. Some want the option to switch according to their needs (for example an SUV for ski trips and a sedan for the summer or maybe a hatchback for the crowded city streets). Some want to keep up with the latest trends and try out new cars as and when they come. Some need access to a car but don’t necessarily need the financial burden of owning and running one. Some just want to pay for what they use and the idea of a car sitting in the garage (if we, the cooler generation, is lucky enough to have one) costing money is just stupid.

Complete vs. Partial Transition of Your Business Model

Should you as a car manufacturer ditch the idea of selling cars completely and instead only offer cars for rentals and subscriptions?

Probably not.

The real competitive advantage is in setting up an additional offering.

The real game-changer is ‘’not only sell but also buy’’

If you are wondering why bother at all then allow me to present a simple argument for the topic.

If you as an automaker do not set up a subscription offering sometime in the near future then you risk becoming just a supplier to young startups who offer this service to their subscribers.

And when it comes to customer contact and relationship, it’s the startup providing a shoulder to cry on to the customer when they have a problem and not you because they are the main point of contact.

As a result, you’ve shifted or let’s say handed over your customers to the savvy startups on a silver platter.

50 points to team Startups.

In reality, we are not talking about a complete transition just yet. The real logic (at least for now) is in getting started with the concept of Mobility as a Service. This in turn can help you expand your customer base by appealing and being relevant to a larger audience by making an additional offering available.

Where Do YOU Stand?

As a company or business in this niche, what is your position? We will leave that upto you to answer.

But we can tell you that there are already some (maybe many) market players ranging from automaker subscriptions to third-party subscriptions. Here are a few examples:

Automaker Subscription

  • Volva with its Care by Volvo service
  • Genesis
  • Jaguar with its Land Rover
  • Nissan
  • Porsche

Third-party car subscription

  • Borrow (limited geography)
  • Fair
  • Hertz My Car (American Rental)
  • Sixt (European Rental)

Startups

  • Cluno
  • Drover
  • MaaS Global
  • Moovel
  • aboDeinauto

For micromobility subscription


Mobility however isn’t limited to just cars.

There are bicycles, scooters, e-scooters, e-bikes and much more. And each micromobility service has its own set consumer base.

Swapfiets, for example, has bike rentals where consumers rent bikes for however long they want in exchange for Cha-Ching Money! and benefit from maintenance by the company itself.

Their blue front tyres dominate the streets.

Conclusion

Mobility-as-a-Service offers great potential and opportunities for your business. Offering a product-as-a-service provides you with the opportunity to have a better connection with your customer and increase brand awareness.

E-commerce companies have to spend a hell lot of money to engage their customers in post-purchase activities and repeat purchases. Whereas you have been given the opportunity to connect with your customers, retain them and build a positive customer relationship, on a silver platter.  

That happens because when businesses offer a product as a service, their relationship with the customer doesn’t end when the customer rents

Decisions made now will determine the future of many companies.

Some will succeed, some will fight for survival and some will die. But we’re not saying that doomsday for the automotive industry is near.

It actually isn’t but there is a new segment of customers who want something different. Companies that can match needs with solutions are set out to emerge as winners.

There are some early birds who are not only revolutionising the mobility sector but also benefiting from the lack of abundant competition and making profits.

But is that all? Is making the switch as easy as turning on the light?

Remember how we called MaaS a revolution, transformation and an ecosystem? Well, it will definitely be equally challenging.

The challenges in question are not so much related to infrastructure and external factors as they are to internal decision making, processes, tools, operations and marketing activities.

Read more to uncover the top 8 challenges that stop your subscription business from scaling.

Get Started With Subscriptions.

Sweet. You can book a meeting here. See you in the meeting
Oops! Please try again. If the issue persists, write to us on info@circuly.io

Everything You Need to Know About Mobility-As-A-Service.

Mobility-as-a-Service is a circular solution to a growing demand for flexible, accessible, user-centric transportation. 
ON THIS PAGE

Introduction

Mobility is the new term and like the sharing economy, it’s here to stay. There’s a transformation in the mobility sector, maybe even a revolution.

A revolution led by e-mobility, autonomous driving and connected cars resulting in changing customer preferences. In this revolution, a new ecosystem for personal mobility is being created and shaped.

mobility as a service

This ecosystem will not only affect automakers and third-party mobility service providers but also other industries related to mobility such as mobility management players, payment processors, local authorities and so on.

However, mobility is definitely not a stand-alone industry as it requires cooperation from multiple emerging technologies.

But what led to the rise of usership and the end of ownership in mobility? What or rather who is driving this trend? How big is the mobility industry anyway in the sharing economy? And more importantly, what does it mean for people, companies and organizations directly or indirectly related to it?

These are some of the questions answered in this blog.

What is Mobility as a Service

Mobility-as-a-Service (MaaS) is a concept that represents a shift from personally owned modes of mobility towards mobility provided as a service. MaaS puts users at the core of the transport services.

MaaS is reshaping how we get around. Wikipedia tells us that the concept first arose in Sweden with a trial monthly subscription model and gained popularity at the World Congress on Intelligent Transport System 2015 in Bordeaux.

Does it really matter who coined the term? We’ll let you decide for yourself. What matters is what it means to live in an era where owning a car or a mode of transportation is no longer a ‘’must have’’.

MaaS is a service promise. Even more precisely, it is an access promise.

A promise to access mobility in various forms and ways.

For example, customers who still want full-time access to a mobility service and flexibility to change or ‘pause’ their usage (car, bike moped) are flocking towards mobility subscription services who often bundle a vehicle, insurance, maintenance and other costs in exchange for a monthly fee.

This kicks long-term leasing arrangements and personal contracts out of the door.

Customer who want mobility on a go and want to pay for usage only, often find on-demand mobility as the optimum solution. And if there is a third set of customer who wants mobility in a different form, MaaS promises to do that.

How Big Is Maas as an Industry?

How Big Is MaaS as an Industry?

1 trillion by 2030

Well, it’s big. No, wait it’s enormous. No no, it’s humongous. Okay, it’s gigantuous (so big that the word doesn’t even exist in the traditional dictionary).

Well, to put a number to it, the mobility ecosystem is expected to grow over 1 trillion by 2030 according to a report by KPMG.

(That’s just 9 years from now. That’s not too far, is it?).

what is mobility as a service

Furthermore according to a report by Statista the bike-sharing service market (another transformational mobility service) alone is expected to account for 13.8 billion euros.

But what do random numbers mean anyway unless you understand the underlying connecting dots?

What Led to the Rise of This Concept?

Keywords

  • Customers demand for flexibility
  • Advancement in technology
  • Shift to urban cities

Customers Demand for Flexibility

Customer preferences towards flexibility, service availability and perceived higher economic benefit is what’s fueling this fire. Mobility in the 20th century meant owning a car or maybe 2 or maybe even 3.

In the 21st century, it somewhat means the same, though there is an uprising.

Take a look at your parents and your grandparents household. Do they own a car or maybe multiple modes of “mobility’’? (maybe your uncle owns a unicycle)

Though a necessity our ‘’owned modes of mobility’’ have plagued our roads with urban traffic and our earth with a  heavy environmental footprint.

But the younger generations think differently and by the younger generation, I mean millennials: people born between 1981 and 1996.

This generation, though dragged down by not one but two ‘’once-in-a-lifetime’’ economic crises, still represents the highest-spending potential in 2020.

To them owning a car is no longer a lifestyle choice.

The younger generation just wants to get from point A to point B and then to point C. They want connectivity, accessibility and affordability and at the same time minimize accidents, pollution and road congestion.

Mobility as a service promises to make that possible as the next best alternative to owning a car is subscribing to a car as a service.

‘I can’t buy that but I want to subscribe to that’ calls for a mind shift among service providers.

Advancement in Technology

An additional contributing factor is advancement in technology. Especially evolution of payment processing infrastructure, which, has made it easier for the customer to click select and buy.

Oh sorry, we mean rent or subscribe or access.

Shift to Urban Cities

As more and more people shift to urban jungles their appetite for ownership decreases.

And why wouldn’t it? We want everything faster and better. Access to mobility is important for us but can we say the same for owning a car?

According to a study by Cox Automotive, all generation groups want the same thing.  Even though car ownership still dominates the automotive landscape (for now) according to the same study 55% percent of Generation Z, 45% of millennials and 28% of baby boomers feel that owning a car is not sooooooo important.

One can argue that there are such numbers spread all across the internet and it does not necessarily mean much. Well think again and look around you. Ask your friends how they feel about owning a car.

What (Who) Is Driving the Trend?

Keywords

  • Tech savvy customers
  • Increasing cost associated with vehicle ownership
  • War for talent
  • The new age of startup founders

Tech Savvy Customer

The urban customer is tech-savvy (the cooler generation). This generation is leading the way towards pay-per-use mobility. We (me being the member of the cooler generation) want transparency and want to make our voice heard.

If we are not satisfied with your product, we will tell you with the hope that you will improve your product and provide us with a better service. This makes us feel valued and enhances our user experience.

Customers (hello millennials) are at the centre now and intend to stay there for the foreseeable future. Hell, we’ve even put them there for our own benefit.

The customer is the king (or the queen, gender equality we know) and as a result, we have new terms like user-centric experience, customer-first product-later, customer-centric approach and so on.

But is the demand homogenous among all age groups? According to a report by McKinsey, it’s not.

While the young (cooler generation) do prefer access over ownership, this mindset may shift as soon as they think about starting a family. Starting a family means stability and so does owning a car. (at least for now)

Millienials want shared mobility but as they start a family they want more stability. Can your business model adapt to this need?

This shift calls for revisiting the big question, ‘’Who is our customer?’’ If you ask me, I would take a diplomatic approach and say ‘’it depends’’. If you ask me “on what?” I would say ‘’what chain of beliefs your business is trying to establish’’.

Increasing Cost Associated With Vehicle Ownership

Moreover, when it comes to private customers the need for flexibility in mobility and increasing cost of ownership is shifting focus from ownership of mobility products to usership of mobility services.

Customers perceive owning a vehicle as an endless money draining pool.

War for Talent

Another thing to consider is the “war for talent”. Companies in some markets are making availability of cars an integral part of their employee marketing campaigns.  

But there’s another factor.

Shared mobility, another term associated with the MaaS concept, is shifting and will continue to shift ownership from private customers to fleet operators.

Such fleet operators serve as suppliers to companies who want the best of the best and are willing to add more benefits to their employee packages.

The New Age of Startup Founders

Most start-up owners also belong to the cool (millennial) generation and hence think differently. They want to make Mobility as a Servive available.

Maybe this makes us revisit the question - what came first: the chicken or the egg? The chicken being service providers starting the trend of mobility as a service and the egg being customers demanding for a more flexible way of mobility.

Yet again, it doesn’t matter, because

IT IS HERE NOW!

Are We Only Talking About Cars?

No, we are not. It’s not just about cars anymore. It’s about bikes, scooters, e-bikes, e-scooters, normal scooters and basically anything with a wheel that gets you from here to there (might even be a unicycle).

A 15 year old wants an e-scooter. When he is 19, he wants a bike for university. The same person wants a car subscription when he is 26 and starting a new job and wants to shift to an owned car when he thinks about starting a family at 30.

The same customer may wish to have different types of mobility services throughout his life.

What Is the Motivation to Rent?

It varies from one customer to another. Some want hassle-free mobility. Some want the option to switch according to their needs (for example an SUV for ski trips and a sedan for the summer or maybe a hatchback for the crowded city streets). Some want to keep up with the latest trends and try out new cars as and when they come. Some need access to a car but don’t necessarily need the financial burden of owning and running one. Some just want to pay for what they use and the idea of a car sitting in the garage (if we, the cooler generation, is lucky enough to have one) costing money is just stupid.

Complete vs. Partial Transition of Your Business Model

Should you as a car manufacturer ditch the idea of selling cars completely and instead only offer cars for rentals and subscriptions?

Probably not.

The real competitive advantage is in setting up an additional offering.

The real game-changer is ‘’not only sell but also buy’’

If you are wondering why bother at all then allow me to present a simple argument for the topic.

If you as an automaker do not set up a subscription offering sometime in the near future then you risk becoming just a supplier to young startups who offer this service to their subscribers.

And when it comes to customer contact and relationship, it’s the startup providing a shoulder to cry on to the customer when they have a problem and not you because they are the main point of contact.

As a result, you’ve shifted or let’s say handed over your customers to the savvy startups on a silver platter.

50 points to team Startups.

In reality, we are not talking about a complete transition just yet. The real logic (at least for now) is in getting started with the concept of Mobility as a Service. This in turn can help you expand your customer base by appealing and being relevant to a larger audience by making an additional offering available.

Where Do YOU Stand?

As a company or business in this niche, what is your position? We will leave that upto you to answer.

But we can tell you that there are already some (maybe many) market players ranging from automaker subscriptions to third-party subscriptions. Here are a few examples:

Automaker Subscription

  • Volva with its Care by Volvo service
  • Genesis
  • Jaguar with its Land Rover
  • Nissan
  • Porsche

Third-party car subscription

  • Borrow (limited geography)
  • Fair
  • Hertz My Car (American Rental)
  • Sixt (European Rental)

Startups

  • Cluno
  • Drover
  • MaaS Global
  • Moovel
  • aboDeinauto

For micromobility subscription


Mobility however isn’t limited to just cars.

There are bicycles, scooters, e-scooters, e-bikes and much more. And each micromobility service has its own set consumer base.

Swapfiets, for example, has bike rentals where consumers rent bikes for however long they want in exchange for Cha-Ching Money! and benefit from maintenance by the company itself.

Their blue front tyres dominate the streets.

Conclusion

Mobility-as-a-Service offers great potential and opportunities for your business. Offering a product-as-a-service provides you with the opportunity to have a better connection with your customer and increase brand awareness.

E-commerce companies have to spend a hell lot of money to engage their customers in post-purchase activities and repeat purchases. Whereas you have been given the opportunity to connect with your customers, retain them and build a positive customer relationship, on a silver platter.  

That happens because when businesses offer a product as a service, their relationship with the customer doesn’t end when the customer rents

Decisions made now will determine the future of many companies.

Some will succeed, some will fight for survival and some will die. But we’re not saying that doomsday for the automotive industry is near.

It actually isn’t but there is a new segment of customers who want something different. Companies that can match needs with solutions are set out to emerge as winners.

There are some early birds who are not only revolutionising the mobility sector but also benefiting from the lack of abundant competition and making profits.

But is that all? Is making the switch as easy as turning on the light?

Remember how we called MaaS a revolution, transformation and an ecosystem? Well, it will definitely be equally challenging.

The challenges in question are not so much related to infrastructure and external factors as they are to internal decision making, processes, tools, operations and marketing activities.

Read more to uncover the top 8 challenges that stop your subscription business from scaling.

Get Inspired By Other Companies Already Operating Such a Model.

See Case Studies

Get Started With Subscriptions.

Get in touch with circuly and discover how the circuly solution can help you launch, manage and scale your subscription business.

Sweet. You can book a meeting here. See you in the meeting
Oops! Please try again. If the issue persists, write to us on info@circuly.io
ON THIS PAGE

Introduction

Mobility is the new term and like the sharing economy, it’s here to stay. There’s a transformation in the mobility sector, maybe even a revolution.

A revolution led by e-mobility, autonomous driving and connected cars resulting in changing customer preferences. In this revolution, a new ecosystem for personal mobility is being created and shaped.

mobility as a service

This ecosystem will not only affect automakers and third-party mobility service providers but also other industries related to mobility such as mobility management players, payment processors, local authorities and so on.

However, mobility is definitely not a stand-alone industry as it requires cooperation from multiple emerging technologies.

But what led to the rise of usership and the end of ownership in mobility? What or rather who is driving this trend? How big is the mobility industry anyway in the sharing economy? And more importantly, what does it mean for people, companies and organizations directly or indirectly related to it?

These are some of the questions answered in this blog.

What is Mobility as a Service

Mobility-as-a-Service (MaaS) is a concept that represents a shift from personally owned modes of mobility towards mobility provided as a service. MaaS puts users at the core of the transport services.

MaaS is reshaping how we get around. Wikipedia tells us that the concept first arose in Sweden with a trial monthly subscription model and gained popularity at the World Congress on Intelligent Transport System 2015 in Bordeaux.

Does it really matter who coined the term? We’ll let you decide for yourself. What matters is what it means to live in an era where owning a car or a mode of transportation is no longer a ‘’must have’’.

MaaS is a service promise. Even more precisely, it is an access promise.

A promise to access mobility in various forms and ways.

For example, customers who still want full-time access to a mobility service and flexibility to change or ‘pause’ their usage (car, bike moped) are flocking towards mobility subscription services who often bundle a vehicle, insurance, maintenance and other costs in exchange for a monthly fee.

This kicks long-term leasing arrangements and personal contracts out of the door.

Customer who want mobility on a go and want to pay for usage only, often find on-demand mobility as the optimum solution. And if there is a third set of customer who wants mobility in a different form, MaaS promises to do that.

How Big Is Maas as an Industry?

How Big Is MaaS as an Industry?

1 trillion by 2030

Well, it’s big. No, wait it’s enormous. No no, it’s humongous. Okay, it’s gigantuous (so big that the word doesn’t even exist in the traditional dictionary).

Well, to put a number to it, the mobility ecosystem is expected to grow over 1 trillion by 2030 according to a report by KPMG.

(That’s just 9 years from now. That’s not too far, is it?).

what is mobility as a service

Furthermore according to a report by Statista the bike-sharing service market (another transformational mobility service) alone is expected to account for 13.8 billion euros.

But what do random numbers mean anyway unless you understand the underlying connecting dots?

What Led to the Rise of This Concept?

Keywords

  • Customers demand for flexibility
  • Advancement in technology
  • Shift to urban cities

Customers Demand for Flexibility

Customer preferences towards flexibility, service availability and perceived higher economic benefit is what’s fueling this fire. Mobility in the 20th century meant owning a car or maybe 2 or maybe even 3.

In the 21st century, it somewhat means the same, though there is an uprising.

Take a look at your parents and your grandparents household. Do they own a car or maybe multiple modes of “mobility’’? (maybe your uncle owns a unicycle)

Though a necessity our ‘’owned modes of mobility’’ have plagued our roads with urban traffic and our earth with a  heavy environmental footprint.

But the younger generations think differently and by the younger generation, I mean millennials: people born between 1981 and 1996.

This generation, though dragged down by not one but two ‘’once-in-a-lifetime’’ economic crises, still represents the highest-spending potential in 2020.

To them owning a car is no longer a lifestyle choice.

The younger generation just wants to get from point A to point B and then to point C. They want connectivity, accessibility and affordability and at the same time minimize accidents, pollution and road congestion.

Mobility as a service promises to make that possible as the next best alternative to owning a car is subscribing to a car as a service.

‘I can’t buy that but I want to subscribe to that’ calls for a mind shift among service providers.

Advancement in Technology

An additional contributing factor is advancement in technology. Especially evolution of payment processing infrastructure, which, has made it easier for the customer to click select and buy.

Oh sorry, we mean rent or subscribe or access.

Shift to Urban Cities

As more and more people shift to urban jungles their appetite for ownership decreases.

And why wouldn’t it? We want everything faster and better. Access to mobility is important for us but can we say the same for owning a car?

According to a study by Cox Automotive, all generation groups want the same thing.  Even though car ownership still dominates the automotive landscape (for now) according to the same study 55% percent of Generation Z, 45% of millennials and 28% of baby boomers feel that owning a car is not sooooooo important.

One can argue that there are such numbers spread all across the internet and it does not necessarily mean much. Well think again and look around you. Ask your friends how they feel about owning a car.

What (Who) Is Driving the Trend?

Keywords

  • Tech savvy customers
  • Increasing cost associated with vehicle ownership
  • War for talent
  • The new age of startup founders

Tech Savvy Customer

The urban customer is tech-savvy (the cooler generation). This generation is leading the way towards pay-per-use mobility. We (me being the member of the cooler generation) want transparency and want to make our voice heard.

If we are not satisfied with your product, we will tell you with the hope that you will improve your product and provide us with a better service. This makes us feel valued and enhances our user experience.

Customers (hello millennials) are at the centre now and intend to stay there for the foreseeable future. Hell, we’ve even put them there for our own benefit.

The customer is the king (or the queen, gender equality we know) and as a result, we have new terms like user-centric experience, customer-first product-later, customer-centric approach and so on.

But is the demand homogenous among all age groups? According to a report by McKinsey, it’s not.

While the young (cooler generation) do prefer access over ownership, this mindset may shift as soon as they think about starting a family. Starting a family means stability and so does owning a car. (at least for now)

Millienials want shared mobility but as they start a family they want more stability. Can your business model adapt to this need?

This shift calls for revisiting the big question, ‘’Who is our customer?’’ If you ask me, I would take a diplomatic approach and say ‘’it depends’’. If you ask me “on what?” I would say ‘’what chain of beliefs your business is trying to establish’’.

Increasing Cost Associated With Vehicle Ownership

Moreover, when it comes to private customers the need for flexibility in mobility and increasing cost of ownership is shifting focus from ownership of mobility products to usership of mobility services.

Customers perceive owning a vehicle as an endless money draining pool.

War for Talent

Another thing to consider is the “war for talent”. Companies in some markets are making availability of cars an integral part of their employee marketing campaigns.  

But there’s another factor.

Shared mobility, another term associated with the MaaS concept, is shifting and will continue to shift ownership from private customers to fleet operators.

Such fleet operators serve as suppliers to companies who want the best of the best and are willing to add more benefits to their employee packages.

The New Age of Startup Founders

Most start-up owners also belong to the cool (millennial) generation and hence think differently. They want to make Mobility as a Servive available.

Maybe this makes us revisit the question - what came first: the chicken or the egg? The chicken being service providers starting the trend of mobility as a service and the egg being customers demanding for a more flexible way of mobility.

Yet again, it doesn’t matter, because

IT IS HERE NOW!

Are We Only Talking About Cars?

No, we are not. It’s not just about cars anymore. It’s about bikes, scooters, e-bikes, e-scooters, normal scooters and basically anything with a wheel that gets you from here to there (might even be a unicycle).

A 15 year old wants an e-scooter. When he is 19, he wants a bike for university. The same person wants a car subscription when he is 26 and starting a new job and wants to shift to an owned car when he thinks about starting a family at 30.

The same customer may wish to have different types of mobility services throughout his life.

What Is the Motivation to Rent?

It varies from one customer to another. Some want hassle-free mobility. Some want the option to switch according to their needs (for example an SUV for ski trips and a sedan for the summer or maybe a hatchback for the crowded city streets). Some want to keep up with the latest trends and try out new cars as and when they come. Some need access to a car but don’t necessarily need the financial burden of owning and running one. Some just want to pay for what they use and the idea of a car sitting in the garage (if we, the cooler generation, is lucky enough to have one) costing money is just stupid.

Complete vs. Partial Transition of Your Business Model

Should you as a car manufacturer ditch the idea of selling cars completely and instead only offer cars for rentals and subscriptions?

Probably not.

The real competitive advantage is in setting up an additional offering.

The real game-changer is ‘’not only sell but also buy’’

If you are wondering why bother at all then allow me to present a simple argument for the topic.

If you as an automaker do not set up a subscription offering sometime in the near future then you risk becoming just a supplier to young startups who offer this service to their subscribers.

And when it comes to customer contact and relationship, it’s the startup providing a shoulder to cry on to the customer when they have a problem and not you because they are the main point of contact.

As a result, you’ve shifted or let’s say handed over your customers to the savvy startups on a silver platter.

50 points to team Startups.

In reality, we are not talking about a complete transition just yet. The real logic (at least for now) is in getting started with the concept of Mobility as a Service. This in turn can help you expand your customer base by appealing and being relevant to a larger audience by making an additional offering available.

Where Do YOU Stand?

As a company or business in this niche, what is your position? We will leave that upto you to answer.

But we can tell you that there are already some (maybe many) market players ranging from automaker subscriptions to third-party subscriptions. Here are a few examples:

Automaker Subscription

  • Volva with its Care by Volvo service
  • Genesis
  • Jaguar with its Land Rover
  • Nissan
  • Porsche

Third-party car subscription

  • Borrow (limited geography)
  • Fair
  • Hertz My Car (American Rental)
  • Sixt (European Rental)

Startups

  • Cluno
  • Drover
  • MaaS Global
  • Moovel
  • aboDeinauto

For micromobility subscription


Mobility however isn’t limited to just cars.

There are bicycles, scooters, e-scooters, e-bikes and much more. And each micromobility service has its own set consumer base.

Swapfiets, for example, has bike rentals where consumers rent bikes for however long they want in exchange for Cha-Ching Money! and benefit from maintenance by the company itself.

Their blue front tyres dominate the streets.

Conclusion

Mobility-as-a-Service offers great potential and opportunities for your business. Offering a product-as-a-service provides you with the opportunity to have a better connection with your customer and increase brand awareness.

E-commerce companies have to spend a hell lot of money to engage their customers in post-purchase activities and repeat purchases. Whereas you have been given the opportunity to connect with your customers, retain them and build a positive customer relationship, on a silver platter.  

That happens because when businesses offer a product as a service, their relationship with the customer doesn’t end when the customer rents

Decisions made now will determine the future of many companies.

Some will succeed, some will fight for survival and some will die. But we’re not saying that doomsday for the automotive industry is near.

It actually isn’t but there is a new segment of customers who want something different. Companies that can match needs with solutions are set out to emerge as winners.

There are some early birds who are not only revolutionising the mobility sector but also benefiting from the lack of abundant competition and making profits.

But is that all? Is making the switch as easy as turning on the light?

Remember how we called MaaS a revolution, transformation and an ecosystem? Well, it will definitely be equally challenging.

The challenges in question are not so much related to infrastructure and external factors as they are to internal decision making, processes, tools, operations and marketing activities.

Read more to uncover the top 8 challenges that stop your subscription business from scaling.

Get Inspired By Other Companies Already Operating Such a Model.

See Case Studies

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