What is Mobility-as-a-Service?
Mobility-as-a-service (MaaS), also known as Transportation-as-a-Service (TaaS), is an on-demand, real-time transportation model that combines different forms of transport services such as private and public transport, taxis, cars, and bike-sharing and car rentals into a single platform. On the platform (which is usually an intuitive mobile app), users can get a train pass or lease a car, scooter, or bike for as long as they need it. And the outcome is an affordable and more convenient method of moving from one place to another.
Besides being a seamless mode of transportation, MaaS offers ecological benefits by reducing the number of private cars on the road, which in turn reduces traffic congestion and results in better air quality. For transport companies, MaaS promises higher profits and higher mobility spend due to more commuters using the platform.
How to Monetize Your Mobility Service
In spite of the growth witnessed in the sector and the huge investments being pumped in, many leading transit operators are yet to figure out a way to make impressive profits from their mobility services. While the ways each operator can unlock value and boost revenue differs depending on their specific circumstances, most transport companies will benefit from using the following methods.
1. Segment your customers and product for smart, profitable mobility
Dividing your customers into different demographic groups is one of the first steps towards developing interventions that promote a profitable mobility service. This action helps you to understand your customers, their needs, and their pain points better than lumping all of them together.
You can separate existing customers and even potential users into groups with distinctly similar behavior, service requirements, and behavior. There are various segmentation criteria you can use for your customers and offerings, but the two major classes are:
Mobility behavior: In mobility behavior, customers or products are categorized by the duration they intend to use the product or service. Since the main goal of these applications is to provide smart and flexible mobility services and encourage people to switch from private cars, it’s important to understand the duration majority of your customers need your product so you can tailor your service to meet their needs.
Socio-demographic: This involves classifying customers into different age groups (e.g. baby boomers, millennials, and seniors) and different places of residence. Unlike older age groups, younger generations are more likely to quickly adopt new lifestyles and mobility behaviors.
Statistics also reveal that younger age groups get their driving licenses late, often don’t own cars, and if they do, they tend to drive less. Not so surprising, this fact contributes to why young people, particularly those who reside in urban areas, are fast to use shared mobility services. On the contrary, urban millennials will rather use mobility apps for real-time navigation or for a long trip.
When classifying according to the place of residence, customers are grouped into rural, urban, and suburban regions. This classification is necessary because rural areas usually have limited access to public transportation, so this reinforces the need for private cars within these regions.
2. Utilize Partnerships
One of the easiest ways a company can make money from its mobility service is through strategic partnerships with other brands. It is especially easier for platforms with a large user base to find companies that would pay to promote their products or services to the member base of the mobility platform. And the best part is the cost of this advertisement is typically low for the transit operator. Most partners that promote items to mobility service users typically use this method of advertising:
- In-app push notifications or targeted emails
- Temporary vehicle wraps or graphics
- Promotional items placed in strategic locations in cars
- Parking lot advertising
- Temporary/permanent in-car or in-app branding
3. Understand Customer’s Willingness to Pay
Willingness-to-pay (WTP for short) is the maximum amount your target customer is willing to pay for your product/service. It is usually stated as a price range or a fixed dollar figure. It is important you understand that while potential users may pay lesser than this amount, oftentimes, they won’t go higher than that. One of the best ways to double revenue from your mobility service is to determine customer’s WTP, and even when you do that, you can just raise prices like that. To ensure your WTP pricing model is sustainable, you need to make sure the value you’re delivering to customers is equivalent to the premium price you’re charging.
Maas Pricing Models
There are different pricing models you can implement in your MaaS business. One option is the pay-as-you-go package, and there’s also the subscription package that is a combination of various transport modes. When deciding on which customer base to sell to, some MaaS providers sell business-to-business (B2B), that is, they offer corporate services to organizations when their employees are going for business trips. Others sell business-to-customers (B2C), meaning they cater solely to individuals, and some sell to all customer segments (both B2B and B2C).
The subscription model is a type of payment option where the customer pays a fixed amount every month. The payment is usually separated into different categories; usually Free/Basic, premium, and also corporate.
Pay per Usage
With this monetization model, although customers might have access to a wide range of features and resources, they only pay for what they use or are charged anytime they use the service.
Estimated Growth Rate of the Mobility as a Service Market
According to stats, the general MaaS market growing at a CAGR of 23.2% is projected to rise from US $52.56B in 2019 to US $280.77 billion by 2027. The bike-sharing service market is expected to grow from US $3.3B in 2020 to US $13.7B by 2026. The ride hailing market is projected to grow at a CAGR of approximately 26.6% while the android and iOS segment is estimated to witness a CAGR growth of 25.3%. As for the passenger cars segment, that too is expected to grow at a CAGR of 25.2%.
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