BTN Europe presents an overview of business travel and MICE predictions for this year
ExCeL London - 22-23 June 2021
We’re used to consuming entertainment using online subscription models, so could travellers soon be streaming ground transport via Mobility as a Service?
Ask any travel buyer about ground transport and they are almost certain to roll their eyes, then tell you about how difficult it is to book through corporate tools and that technology needs to find an answer.
As one buyer puts it: “When you talk about the end-to-end journey, it’s always the end part that’s the problem – booking ground transport is a still a pain point for us. The booking platforms aren’t good enough yet and the industry’s just so fragmented with so many different players.”
But maybe – just maybe – technology is finally about to start removing this tricky barrier to the much-lauded frictionless business travel trip. The answer may lie in Mobility as a Service (MaaS) technology that essentially aims to consolidate all different types of ground transport – both private and public – into a single app or platform allowing travellers to choose the best way of getting from A to B, whether it be by car, train, bicycle or even a scooter.
The hotbed for this particular type of transport technology revolution is not – for once – in Silicon Valley, but tucked away in northern Europe and the Finnish capital of Helsinki in particular, which is widely regarded as leading the MaaS revolution (see box below).
[learn_more caption="Helsinki – the city where MaaS ‘really works’"] Helsinki is effectively acting as a “guinea pig” for how Mobility as a Service (MaaS) can help transform a city’s ground transport.
The Finnish capital’s authorities have been working for eight years on ways to change its transport infrastructure to reduce the use of private cars around the city, with the ambitious target of making it “unnecessary” for residents to own their own car by 2025.
One of the key elements of this strategy has been the creation of a MaaS app, called Whim, which offers a range of transport packages, including buses, trams, bike hire, taxis and rental cars around Helsinki.
Three different payment packages are available, including an “unlimited package” for €499 per month allowing unrestricted travel on public transport, city bikes, taxis, rental cars and car sharing.
There is also another cheaper monthly package for €62 allowing unlimited bus travel and bike rides, as well as a “pay as you go” option.
The Whim app asks users to enter their destination and then calculates the optimal route taking into account the various transport options available.
So far, Whim has more than 45,000 subscribers who have taken more than 1.5 million trips in Helsinki since the app launched in 2016. The app also operates in the Belgian city of Antwerp and has a presence in the West Midlands, where it is supported by National Express, Gett and Enterprise.
MaaS Global, the company that created Whim, now wants to expand into new markets after securing €9 million in funding earlier this year.
Sampo Hietanen, founder and chief executive of MaaS Global, says: “We are extremely happy that we have been able to prove the MaaS concept really works. Now we are able to strengthen our global presence and keep on being the forerunner in this new and exciting industry.”[/learn_more]
A Utopian vision? As a concept, MaaS represents a move away from people owning private vehicles towards a technology-based platform that allows travellers to switch between multiple different modes of ground transport, including public services such as buses and trains, depending on their journey requirements and personal preferences.
In this kind of utopian vision, a company may no longer need to have its own fleet of cars for employees, or even allow staff to use their own vehicles (the so-called grey fleet) for business journeys. Instead, under a MaaS operation, the corporate would pay a subscription or “pay as you go” fee to access a range of ground transport options, which can be booked through a single online platform. It’s similar, in theory, to the well-established Software as a Service (SaaS) IT model or even subscribing to entertainment services, such as Netflix and Spotify.
Dan Hawkes, head of sales performance, corporate mobility and market intelligence, for Europcar Mobility Group UK, explains: “In its ideal form, MaaS should give businesses a means of providing employees with access to a range of transport solutions that cater for a range of different journeys.
“It could be short-term car hire for a new employee, electric vehicle car use for a quick trip from one business location to another, a chauffeur-drive for an airport pick-up to a city meeting, or long-term van rental for deliveries around the UK.”
At the moment, Mobility as a Service is very much about single transactions
It’s no surprise that the big-name technology suppliers in the ground transport industry see MaaS as a potential game-changer in the way the sector operates and supplies “joined up” services over the next few years.
For example, Uber’s chief executive Dara Khosrowshahi has talked about how he wants customers to have the ability to combine Uber rides with journeys on public transport networks. As a sign of things to come, Uber is now offering public transport information on its app in London, as well as adding new services, including launching an electric bike rental option through a partnership with Jump.
While it’s easy to see the advantages of having a single ground transport app or platform for consumers and travellers, what are its implications for travel buyers who have long found ground transport a tricky area to manage? Does MaaS have the potential to take the pain out of this part of the end-to-end business trip?
Paul Wait, commercial director at B2B mobility platform iGo, says: “This will open a whole host of opportunities when it comes to planning and managing trips.
“It will create cost and time savings for businesses, which can more efficiently plan business trips, as well as offering smoother commutes to employees. Individuals will be able to manage their journeys while en route – companies will just need to ensure the platform is in place to make this happen.”
Groundscope’s chief executive John McCallion believes the key to the future success of MaaS platforms is to ensure business travellers “feel confident that the service booked will work and get them to that critical meeting or flight on time”.
Single payment channel
Those in the traditional ground transport industry also see the benefits of adopting a MaaS-based system, offering simplicity in how and where travellers can choose the most appropriate service and also allowing payment through a single platform.
Craig Chambers, group chief executive of TBR Global Chauffeuring adds: “MaaS can offer a number of benefits and value, primarily providing access to a single application to provide access to mobility, with a single payment channel instead of multiple ticketing and payment operations.
“For its users, MaaS should be the best-value proposition, by helping them meet their mobility needs and solve the inconvenient parts of individual journeys, as well as the entire system of mobility services.”
[learn_more caption="On-demand booking platform"] Booking platform Groundscope has formed a partnership with technology consultancy DataArt to create a new updated car booking app.
The two companies worked together to create the new iOS app for Apple mobile devices, which allows corporate clients to book services with transport providers around the globe.
The new app gives users the ability to arrange and manage journeys, as well as making all payments through a secured platform. DataArt is also working on an updated Android version of Groundscope’s app.
John McCallion, Groundscope’s chief executive, told BBT: “What our clients have asked for is the same level of service that they receive on our pre-booked service but available on demand.
“We have listened to this and have invested in launching a new iOS and Android mobile app built by our technology partner DataArt and now provide an on-demand service in the 500 cities we operate in so that our customers can use us while on business within a city.”
Anton Krasikov, account manager at DataArt, added: “The challenge for DataArt was to create Groundscope’s iOS application and integrate it smoothly with the existing booking platform. The resulting solution offers users a modern look and feel combined with a high-quality service in line with leading-edge technology.”[/learn_more]
Subscription or pay as you go?
One of the first questions sure to come up in any discussion about MaaS is how will organisations end up paying for these services? While there is clearly a long-term goal of offering a subscription-based service, many in the industry think that corporate clients will initially test the water by opting for “pay as you go” models.
Sandra Witzel, head of marketing at MaaS technology specialist Skedgo, says: “There is a movement behind the subscription model, favoured, for example, by Finnish MaaS app Whim. But, at the moment, MaaS is very much about single transactions, which is already an improvement if it can be done all within the same environment.”
Witzel thinks that corporate clients will mostly want to set a budget for what their travellers can spend on ground transport when booking through a MaaS platform.
“For business travel, we’re looking at what we call corporate mobility or mobility budgets,” she explains. “Business travellers would be able to use their budget via a customised MaaS app. The companies can manage and analyse the budget behind the scenes and have the ability to incentivise certain travel behaviour, such as using public transport.”
Witzel also points to some potential pitfalls of a subscription-based form of payment for ground transport services. “A subscription would require the traveller to have very consistent travel behaviour every month,” she says. “With video and music streaming, users can change their behaviour with little financial consequence as the monthly fees are comparatively low. A transport subscription is a lot higher and customers can potentially lose out if they don’t use their transport allowance fully for a few months in a row.”
Groundscope’s McCallion also thinks the subscription model for MaaS may not be entirely suitable for managed corporate travel because of how ground transport services tend to be used by business travellers.
“I am not sure that the subscription model lends itself well to the business travel market, as generally business travellers want to use services at peak travel times when the system will have high demand and capacity constraints, and business travellers have little demand for travel in the quieter periods of the day,” he explains.
“To work, it will need a large number of corporate clients to believe that it [a subscription] will save them money rather than a pay-as-you-go charging model.”
McCallion believes corporates considering MaaS services are most likely to begin by using “pay as you go” models to “ensure they are getting value for money”, which, he adds, is “no real change” to how they operate now.
Another major potential issue for travel buyers around the introduction of MaaS is how they can ensure duty-of-care to employees when they may be potentially using a variety of different ground transport suppliers and services.
MaaS should actually help to solve this problem of fragmentation and multiple suppliers, argues Europcar’s Dan Hawkes. He adds: “Ultimately, the duty-of-care for all employees, irrespective of their mode of transport, is the responsibility of their employer. The beauty of a consolidated MaaS platform is that the employer will have the oversight of all the mobility solutions being accessed.
“This could be particularly valuable in tackling the duty-of-care risks of grey fleet usage. Instead of being dependent on employees using their own vehicles – which an employer may not have any control over in terms of servicing, maintenance and even insurance – MaaS can provide access to services that comply with company standards. For example, short-term rental or car share will have to provide vehicles that meet safety standards.
“The consolidated platform will also mean that reporting of any issues during a journey is streamlined so that necessary actions can be taken quickly, reducing the impact of employee downtime.”
But Groundscope’s McCallion thinks it will take some time before corporate travel departments start to trust MaaS platforms when it comes to their ability to provide duty-of-care to travellers.
“Employers need to know that the trip booked is safe and sharing a ride-hailing service with someone unknown does not really provide duty-of-care to their travellers,” he adds.
“For MaaS to really work for corporate clients, whoever is providing the overall connected service needs to ensure that all modes of transport within the service are fully insured and licensed. However, many IT companies just want to be the booking agent and do not want the responsibility for the service delivery or the costs or legal liability for the service if an accident happens.”
One UK-based buyer agrees that the biggest challenge for MaaS could be “what happens when something goes wrong”. He adds: “If you’re using all these different forms of transport, who gets the call if there’s a problem? Tech companies often can’t provide this type of service. Who takes responsibility?”
Those working in this field seem to be aware of these potential concerns – the MaaS Alliance, which is an association working to create the conditions to allow the “full deployment” of MaaS around the world, is currently looking at the issue of insurance with a workshop on the subject planned for later this year.
To work, it will need a large number of corporate clients to believe that it will save them money
Having the right regulations in place will also be crucial to the success of MaaS within the corporate market, argues TBR’s Chambers. “In the creation of a new marketplace, the question needs to be asked around how the industry will be regulated to manage duty-of-care requirements and ensure quality assurance standards are adhered to and met,” he adds.
“For MaaS services to succeed, it is imperative that this critical demand is considered. Without this, there is the potential that things could go wrong. However, should cross-industry collaboration and regulation work in tandem, then there will be the support framework to tackle any issues that might arise.”
Despite these concerns, iGo’s Wait believes using consolidated MaaS platforms will be able to enhance duty-of-care by improving traveller tracking in the future.
“Real-time tracking will become the norm with transport relaying information backwards and forwards all the time,” he adds. “Ultimately, it is everyone’s responsibility to reduce risk for business travellers, including the travellers themselves.
“Technology will increase the amount of information we have at hand to assess any risks and provide a clearer picture. Both companies and employees will be able to see which vendors are trusted when booking transport, and whether they should travel through a particular area.”
MaaS – like many technology-based solutions to business travel problems – sounds great in theory with plenty of obvious advantages for both the traveller and buyer.
But it’s still very early days in the process and the road test will be how well it works in practice – can MaaS really solve the ground transport conundrum and offer the one single solution the industry has been crying out for? We will have to wait and see. Just an improvement in booking capability will be one big step forward for the industry.