Why 'MaaS' is so important to the future of motoring

Tuesday, 24 December 2019

It's a brand that dominates the new-car market. But Toyota New Zealand (TNZ) also accepts that a shift towards subscribing to a vehicle rather than buying it outright is inevitable.

Analysis of future motoring trends, both nationally as well as overseas, has convinced TNZ that a shift away from personal car ownership in favour of mobility provided as a service is already showing life.

The brand's thoughts come to light as parent Toyota Motor Corporation in Japan opens up more on another, further-step technology surely on a merging path – autonomous driving. 

It is suggesting advanced self-driving features are also under development, though Toyota's view is that it might be best for these to first show in commercial vehicles before being added to passenger cars meant for personal use.

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That would add a new flavour to the MaaS – industry speak for Mobility as a Service - game, which TNZ is also engaged in through ownership of CityHop, the country's first car-sharing service which specialises in by-the-hour rental. 

TNZ bought the business in November of 2018. It's operating in Auckland and Wellington, but expansion into other centres seems on the cards.

This involvement doesn't suggest TNZ is moving out of the car selling business, where it has dominated for decades.

However chief operating officer Neeraj Lala points out that the maker also sees logic is keeping up with, if not setting trends.

'How we own, use and pay for cars is changing fast,' he says. 

'If you think the car-sharing market of Ola, Uber and Zoom is maturing, think again. 

'These smartphone and app-based ride-sharers and car-rental by-the-hour services such as Cityhop are just the first steps in the shift towards Mobility as a Service.'

Lala says the concept of a car subscription service is a key MaaS ingredient.

'Initially we see car subscription services as a natural extension to leasing, particularly to fleets,' he says. 

A commercial car subscription service could offer greater flexibility in terms of choice and rotation of vehicles and access to a wider range of maintenance services. 

'We also see a time when millennials, instead of buying a car, will be happy to be billed monthly to use a new or used car.'

It's also possible that a monthly fee will include the electricity consumed, the car's insurance and a share of road user charges and taxes, he added.

It's new ground for NZ but already trialled overseas. 

Mr Lala points to Japan and Toyota's Kinto service. A driver signing up for a maximum of three years can lease a different vehicle every six months and not worry about extra maintenance or insurance costs. 

'Toyota itself is also going through a transition from being a car company to being a mobility company and this goes far beyond just electrification.' 

Does that mean Toyota doesn't see a future of personal vehicle ownership? 

Not at all. 

'We do see a decline in ownership in some developed markets and in large urban areas where new MaaS technologies best suit,' he acknowledges.

'[Yet] we [also] see a future where all forms of mobility will need to co-exist.' 

He agrees that this sort of talk is not easily digested – many people are used to car ownership as being core to daily life and MaaS is hardly a household term. 

But that's changing: 'MaaS is gaining traction as perhaps the largest transformational change to happen to the motor vehicle industry.' 

It's becoming a large arena attracting powerful players from manufacturers such as Toyota to digital developers, financial services, car rental companies and public transport operators. 

Initially MaaS was about shifting from personal vehicle ownership to ride-sharing services. In that light, Mr Lala says, commuters in NZ's largest cities now have more mobility options than ever before.

'They can use their car or leave it at home and take a bus, a train, pick up an e-bike, rent an e-scooter or 'e-hail' a taxi to work.' 

But with increasing connectivity via a smartphone and the Internet of Things via 5G, plus uplift in urbanisation and traffic congestion, MaaS is likely to be much, much more.

'We see a near future where a customer will be able to book a vehicle, pay for its use, its insurance, the power consumed by the car and a share of its road user charges via one application. Going one step forward, the same app will connect to public transport systems and pay for a bus ride or unlock an e-bike.' 

Even further into the future MaaS is likely to cover an entire door-to-door trip involving a multiple of transport modes, including autonomous cars and other service providers. 

Currently, the question on most people's minds is the magnitude of the change, when will it arrive, and where the first trials will be. 

In fact, forms of MaaS are already up and running in Finland and Japan. 

In Helsinki, the Whim app accesses rental cars, city bikes, public transport and taxis. With a range of modes, naturally there is a range of packages for the week, the weekend or unlimited access. Finns pay $NZ428 a month for a weekend car, public transport, bike hire, and discounted taxis. 

My Route, a joint venture between Toyota Motor Corporation and Nishi-Nippon Railroad and launched in November 2019, was developed by Toyota as a multi-modal mobility service for smartphone users in two Japanese cities. 

It supports mobility services with route search combining different modes of transport including public transport and car hire, reservations and payments, and shopping and event information. 

As for when self-driving becomes an active ingredient of MaaS? James Kuffner, chief of Toyota Research Institute advanced development, says the brand is primarily developing this technology in areas including on-demand ride services, mobile shops and ambulatory hospitals, rather than for private use.

This is because it perceives the operators of these vehicles are best-placed to control when and where they are deployed and oversee their maintenance.

'It will take more time to achieve Level 4 for a personally owned vehicle,' Kuffner told media in Japan, referring to the automation level at which vehicles can drive themselves under limited conditions.

'Level 4 is really what we are striving for to first appear in mobility as a service,' he said.

Toyota is set to soon release its first autonomous car capable of driving itself on motorways but is adopting a longer view toward cars with self-driving technology and artificial intelligence than many competitors.