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Tuesday 19 May 2020 , 2:46 pm

Factors Bolstering the Mobility as a Service (MaaS) Market

Rising adoption by millennial population for the MaaS and continuous advancements in various technological platforms are predicted to be the main reasons to fuel the market in future.
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As world leaders are working together to implement sustainability in each and every field, mobility as a service (MaaS) is one of the eco-friendly strategies in transportation section that lead towards the sustainable future. Currently, the MaaS market is witnessing staggering growth caused by a numerous factors.

The most significant factors that are responsible for the growth of this sector are rapid urbanization and increasing number of passenger cars on the roads that not only lead congestions but also parking problems. Apart from the application platform service providers, large automotive OEMs have also announced their interest to invest in this business opportunity. It is predicted by experts that MaaS will become a key driver in terms of growth and profitability in the automotive industry outpacing the profits earned by manufacturing cars by automakers.

Some of the major companies contributing significantly to the MaaS market are Uber Technologies, Inc., Moovel, Bridi, Whimm, and Qixxit, etc.

The research report by the Insight Partners states that the global Mobility as a Service (MaaS) market is expected to grow at a CAGR of 36.4% during 2018–2025 and will reach to US$ 476.34 Billion in 2025. And the same report mentions that the market in Asia Pacific region is expected to witness a CAGR of 7.3% in the coming years.

Some of the main reasons that will accelerate this growth of the MaaS market are continuously rising demand for one-stop solution that fulfils seamless transportation service need and advancements in technological infrastructure.

Rising Demand for One-stop Solution that Fulfills Seamless Transportation Service Need

People that travel frequently across city, state or countries face many hassles regarding planning and boarding different modes of transportation. Some modes provide node-to-node transportation service. On the other side, other services provide last mile connectivity. In such scenarios where a traveler needs to hire various modes of transportation, require long term planning and time bound constraints.

As a result, demands for more integration into transportation services for efficient, hassle-free and seamless travels and easy payment systems are rising. MaaS enables passenger to pay for the entire trip beforehand and some services also offer monthly subscriptions for frequent travellers. This factor is driving the MaaS market across geographies over the years.

Advancements Technological Infrastructure

MaaS—a service-based business model—has seen rapid growth as a result of rising use of smartphones and related accessories in the global market. Researchers state that as MaaS is a digital data driven service, it is expected to be benefited with the advancements in the field of analytics. By using analytics techniques, mobility service provider company is able to understand its customer’s preferences and send out optimized routes.

Big Data and IoT invasion help service providers in terms of provisioning best services to the customers. Plus, combination of big data and new autonomous transport systems enables various opportunities to innovate and refine MaaS offerings.

Data shows that most of the millennial population is adopting these new mobility models and deciding to not own cars. On the other side, transport authorities are looking for new technology platforms to manage the use of their assets. Experts in the industry predicts that the advancement of various technological platforms will fuel the MaaS market in future.

Impact of Coronavirus Pandemic on the MaaS Market

Mixed impact of Coronavirus Pandemic in the MaaS Market has been observed. Many companies including Uber and Lyft are seen facing massive ride drops due to COVID-19 crisis. People are under lockdown in many countries or they are avoiding to travel by these vehicles due to the rising concerns regarding infections. Companies are coming up with strategies to deal with the situation.

For instance, yesterday, Uber announced that it will concentrate on its core businesses in ride-hailing. Its Chief Executive Officer Dara Khosrowshahi sent an email to employees on Monday announcing that the company is planning to cut 23% of its workforce to become profitable despite the pandemic.

On the other side, Jean Liu Qing, President of Didi Chuxing, Chinese ride-hailing giant said that the core business of the company has been profitable as ride orders in domestic market recover from the impact of the Covid-19 pandemic.

So, even if the market growth is seen restricted in 2020 and companies are managing to survive, market analysts predict that the market will start to recover from 2021.

Neha Mule

Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.

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