This Startup Is Trying to Convince Clients to Give Up Cars
(Bloomberg) -- The idea is simple: a transport service that’s so good, you’ll never need a car again.
It’s what Finnish startup MaaS Global Oy has been working toward since 2015. The company has developed a mobile app, Whim, that’s already being used in several European cities and in Tokyo. In the capital of Finland, 12% of users already say it’s prompted them to give up their cars, with as many again saying they plan to.
MaaS Global, whose investors include BP Plc, Mitsubishi Corp. and Toyota Financial Services, says its app can fix urban congestion and reduce pollution. That’s as research shows that living in an environment with cleaner air contributes measurably to happiness and wellbeing. Finland, where the service pioneered, happens to have the best air quality in the world. Coincidentally, it’s also the world’s happiest country.
Chief Executive Officer Sampo Hietanen says creating a world in which it’s more convenient not to have your own car is an obvious way to cut carbon emissions in the transport sector. In the U.S. alone, transport accounts for almost 30% of total greenhouse gas emissions, more than any other industry.
“Realistically, if we want to tackle transport’s CO2 emissions, we have to come up with a way to preserve our freedom of movement in the same way that owning a car does,” Hietanen said in an interview.
Whim, which just merged with Wondo, a Spanish rival founded by infrastructure company Ferrovial SA, offers users the option of planning and paying for a trip via a single app. It provides access to a range of services such as electric scooters, city bikes, public transport and even fixed-price taxis over short distances. The services vary from city to city, with as many as 300,000 people using Whim around the world.
Both Whim and Wondo work as route planners, suggesting the best way to get from A to B, and offer the option of buying tickets or booking vehicles within their apps. On top of pay-as-you-go plans, Whim has monthly subscriptions -- much like Netflix for entertainment.
“We’ve learned that the pricing model needs to be pay-as-you-go initially, because people first want to try this out before they commit to subscriptions,” said Hietanen, who is also the company’s founder.
“The value of MaaS is not in beating the convenience of the private car, which is rather unrealistic, but in creating a multimodal travel option that offers the opportunity to people to be part of an initiative designed to create more liveable, socially inclusive and sustainable futures,” Elena Alyavina, Alexandros Nikitas and Eric Tchouamou Njoya at the University of Huddersfield in the U.K. wrote in a research report.
For Hietanen, it’s clear the industry is still in its infancy, and the real promise of mobility-as-a-service will become apparent when it’s combined with shared self-driving (hopefully electric) vehicles that can spread the potential market beyond urban centers to rural areas.
“We’re like Netflix when it was still mailing DVDs to people,” he said.
What’s more, the service will only be as good as the underlying transport network, and the cities where such apps are offered tend to already have extensive public train and bus lines in place.
Whim is currently available in Helsinki, Vienna, Antwerp, in the Birmingham region in the U.K. and in the greater Tokyo area. On June 1, it launches in Switzerland, the first time a MaaS service will span an entire country.
Wondo operates in Madrid with plans to expand in Spain and Portugal, Hietanen said. MaaS Global is hoping to use Ferrovial’s existing network to eventually take its service to the U.S. and South America, after its plans to open in Miami, Vancouver and Chicago last year were scuppered.
“Creating the service model is the key to a gigantic business opportunity,” Hietanen said. “But it’s also the key to resolving cities’ traffic problems and its environmental impact.”
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