What Mobility-as-a-Service Means for Small Operators

Mobility-as-a-Service (MaaS) brings together transport options into a single digital service. Think of it as an app that connects buses, taxis, private hire, and even things like public transport and cycle hire. Think of it as Deliveroo but for transport.

For small UK transport operators, like a taxi service, it helps gain visibility and new customers. But on the flip side, you have less control over the customer relationship and typically pay a high commission. Understanding mobility as a service, and its pros and cons, are needed before making a decision on using one.

What Is Mobility-as-a-Service?

MaaS apps may combine the following into one integrated platform:

• Journey planning
• Booking private transport
• Ticketing for public transport
• Payment 

For customers, there’s a lot of benefit to using this in an unfamiliar city, especially the journey planner element, and some people may assume local taxis are high-risk regarding scams. The ideal MaaS platform serves the entire travel process, from planning and route discovery to booking and paying.

Providers structure access in a few ways. Elements for customers include:

• Pay-as-you-go (fee per journey)
• Multi-modal tickets (several operators and transport types)
• Monthly subscriptions (bundle a set number of trips across several transport types)

It’s important to know the customer’s options, because these directly impact the economy and revenue model for operators serving the platform. You need to know if electric vehicles can charge customers a premium before deciding on what fleet to procure. Since 2020, England alone has seen 18 e-scooter trials. Scooters and cycle hire are growing in supply. But coverage depends on the area, and this can be a gap in the bicycle-sharing market where some towns are not served. Should you secure a permit, it can have huge potential.

How Does Mobility-as-a-Service Work?

MaaS platforms, like Deliveroo and Twitter, depend on having a high number of users and content/services. They also depend on having several parties cooperating: the platform which hosts the app, the transport operators who run buses, taxis, and bikes, payment providers to settle the money, and local authorities who can coordinate public transport networks. And, great software that can handle trip planning, often relying on APIs from other map or live traffic providers.

When a passenger books, the booking (and payment attached to it) has to flow back to each operator providing the service. Not just to secure revenue, but so the driver can confirm the valid ticket.

The West Midlands ran one of the UK’s first MaaS pilots (Whim West Mid app) and it combined bus routes, tram travel, taxi bookings, and car hire. All in one account, covering 2.8 million residents accessing it across seven local authorities. Both pay-as-you-go and subscription-style ticketing options were available.

The UK MaaS Context

The UK doesn’t directly regulate MaaS, but the Department for Transport publishes the voluntary MaaS code of practice and consultation. The code sets expectations rather than legal requirements. Some of the things it covers include:

• Data sharing
• Transport integration
  Accessibility for customers without smartphones
• Consumer protection
• Fair competition
• Carbon emissions 
• Open data between platforms

The same consultation had 66 responses, with 90% of respondents backing the data standardisation proposals and 86% in favour of consumer protection guidance.

UK transport policy more broadly treats sustainable transport increasingly as a goal that MaaS is supporting. The argument is that it’ll be easier to choose a bus or shared car journey, so the environmental sustainability comes from cutting down on solo driving. This is why some local authorities are keen on getting regional MaaS schemes off the ground.

When a new MaaS platform does open up, there’s a timely moment for operators to potentially be one of the early few. Not only can this be a revenue opportunity, but a competitive one, gaining early platform reviews.

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What MaaS Means for Small Transport Operators

Although it’s platform-dependent, many types of transportation services can take part in MaaS. Small, local bus companies and private transportation firms have a strong chance of partnering. Ridesharing businesses, assuming they’re willing and able to integrate with the MaaS platform, can be involved, though often they’re the main competition to the MaaS app (e.g., Uber).

There are 342,300 licensed vehicles in England’s taxi and private hire market

Local taxi firms are not only commonly included on MaaS platforms, but it becomes their main reach for survival against giants like Uber, who frequently undercut them.

Over 2,000 community transport organisations provide 15+ million passenger trips a year

Given that there are over 2,000 firms, many of which are SMEs, it’s clear that there’s still a demand for them. MaaS can often include them alongside much larger brands, which helps level the playing field when it comes to visibility (larger firms' SEO authority can easily rise to the top of Google).

Business Opportunities for Small Operators

Joining a MaaS platform helps visibility, but also open up new mobility solutions and revenue streams that before would be hard to reach. Some opportunities include:

• Find new customers with wider digital distribution. New customers may trust your brand more, despite not having heard of it, because the MaaS app acts as a trust certificate.
  
• Fill up unused capacity and increase demand during off-peak hours.
  
• Become a first-mile and last-mile connection for rail or bus services. For example, National Express may take tourists 7 hours across the country, but end up in a far-removed bus terminal, two miles from their hotel.
  
• Develop partnerships with councils, tourism organisations and other operators.
  
• The MaaS platform may export your journey and transaction data in a very clean way. This could improve data-driven decisions, like routes and service availability.

Ultimately, it’s difficult for small operators to work in isolation, particularly in a world where consumers rely on their smartphones for travel. Google Maps may point users to train tickets, Uber uses its own unique model for cheap fares… MaaS can be a chance to join in with tech-focused urban mobility infrastructure.

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What Small Operators Need To Join a MaaS Platform

While customers are all too aware of high transportation costs, local operators understand how vast the costs of building a native, proprietary booking app are. But wanting to join, and being able to join, are two different things. Below are some common requirements and sticking points:

• Having accurate and current information about routes, fares, schedules, and accessibility. MaaS platforms may depend on your data.
  
• Use booking or dispatch systems that can connect with external platforms (closed systems are an issue).
  
• Find out if you need data integration via an API or a third-party provider to integrate your older booking system with the modern MaaS.
  
• Have commercial agreements that cover fares, commissions, refunds, customer responsibilities, and must all be reviewed before signing.
  
• Make sure that staff (and your system) can manage the bookings arriving from various sales channels at once. Double-booking one driver with two customers is a worst-case scenario, which the MaaS will be looking to avoid.

Interoperability is something that increasingly comes up in discourse around MaaS apps, much like it did with Open Banking. It’s something to stay up to date on. Connected cars, and in some cases, autonomous vehicles, are expected to be trialled.

Integrated Ticketing, Payments, and Revenue

Most MaaS platforms ask the passenger to pay the platform directly, though some may allow operators to handle their own payments (if they do, a modern solution like myPOS becomes important for information sharing and reporting with the MaaS platform). 

Payment options are important to small operators, as it can change the numbers and KPIs drastically. Below are some common ways that platforms handle payments.

Whichever the model, an operator needs to know when and how funds arrive. It must also be written in the clear T&Cs about refunds, cancellations, disputes, and tips - not just to the customer, but between the operator and the platform.

Data, Accessibility, and Customer Protection

Two things drive the success of these platforms: Good data and clear accessibility. Customers do not care about anything other than having all the options in front of them, and comparing them based on value for money. Some will go for the lowest price no matter what, others prioritise comfort, privacy, and service. But user experience is at the core.

While a lot of this is the MaaS platform’s responsibility, they depend on operators to help provide accurate data. It should also be established in advance who is responsible for customer support. 

Run through these questions with the MaaS provider:

• Who does the customer speak to for a lost phone or complaint?
• What reporting, if any, is required to the platform when incidents occur?
• What accessibility information do you require?

While it may feel like you’re hiding behind a MaaS at first, your reputation is still on the line if customers have been promised one thing, but get another. Or, if the MaaS takes charge of complaint handling, but fails the customer.

Risks and Challenges for Small Operators

MaaS isn’t without its downsides and risks. After all, there can be an irony to joining the ecosystem of a large tech company in an effort to compete and survive against Uber (another large tech company). 

Below are some risks to consider:

• High platform commissions mean (in isolation) lower revenue per trip, much like a Chinese takeaway joining Deliveroo. Some reporting suggests commissions can be as low as 4.5% wholesale (6.5% blended consumer net take rate), though this is on rail ticket retail. On-demand transport services already have tight margins.
  
• Loyal customers begin booking in-app rather than directly.
  
• Large platforms may control how operators are ranked and presented. Could it even be possible for others to pay for higher visibility within the app? If so, it may not be the level playing field you think it is.
  
• Technical integration can be tricky and expensive. New software may be needed, and staff may need to be retrained.
  
• Operators may lose some of their access to customer relationships and booking data. The platforms may take over this, which can hurt an operator's accumulated capital and goodwill.
  
• A complicated chain that can break or contain inaccurate information, leading to missed connections, refunds, complaints, especially in multi-modal journeys.
   
• Depending on one platform creates commercial and operational risk. If the MaaS app breaks, the local bus company’s revenue is hit. If commission is increased, the operator has little power to negotiate, especially if their customers have now migrated to using the app.

None of these risks rules out participation, and one of the most important factors in joining an MaaS platform is around exclusivity: can you continue operating independently alongside the app? This can help retain some customers independent of the MaaS.

Example: A long-time customer of United Taxis makes a multi-modal booking. The bus is late, but the taxi operator wasn’t notified. The driver waits for 30 minutes before attending their next job, leaving the customer stranded. Upon writing a complaint, the MaaS platform is late to respond, and United Taxis loses a loyal customer

How Small Operators Can Prepare for MaaS

Operators who prepare for MaaS properly can get more out of the new ecosystem. Consider the following checklist before committing:

• Review whether the current scheduling, booking, and payment systems can actually integrate with third parties. Do you need an upgrade? If so, will the costs yield a positive return given the estimated profit increase from joining the MaaS?
  
• Digitise service, pricing, accessibility, and availability information. Records must be full, in real-time, with no incomplete or pen-and-paper data.
  
• Calculate the minimum profitable fare after the usual costs and the new platform fees. Pricing decisions rest on these.
  
• If available, consider a limited pilot scheme before committing more resources.
  
• Agree on data ownership, payments, cancellations, and customer service in writing. This isn’t just a new venture for you, but possibly for the MaaS too, so there may be room to negotiate.
  
• Compare platform-generated bookings with direct sales in the early stages. Don’t fall victim to the fallacy of sunk costs - if it’s not looking profitable, exiting early may be best.

Travel planning is a big part of the user experience. If you’re a coach service that serves a fantastic route (e.g., a popular rural hiking spot), but visitors do not know it exists (e.g., it doesn’t appear on Google Maps), this could be a big factor in joining a MaaS platform that has route planning. But, part of the preparation will be to ensure the platform does have such features that will funnel customers towards you.

How myPOS Can Support Small Mobility Operators

A lot of your negotiations and decisions may rest on payments. When the MaaS platform handles payments, you’re not only exposed to their commission (and potential hikes) but also their payment fees. For example, they may accept Amex, while you may have previously not due to the high fees, and these will now be passed on to you.

For operators researching credit card machines for taxis, it’s important to have a light terminal that is easy to handle, accepts mobile wallet payments, and has strong connectivity. The myPOS Go 2 is exactly that, and only costs £39 (excluding VAT). Though, it is possible to accept payments on your smartphone via the myPOS Tap to Pay app. Now you get to choose whether you want to accept the likes of Amex.

Most impactful of all is the instant settlement from myPOS, where revenue funds become instantly available. MaaS platforms that control payments may have payment cycles that leave you waiting weeks, which can be difficult for cash flow.

Urban transport solutions are increasingly centred around paying online because it locks in a price and avoids awkwardness. myPOS Payment Links and Payment Requests can facilitate remote bookings and deposits, and these can help keep your independence outside of the MaaS ecosystem. That way, you have two diversified revenue channels.

Frequently Asked Questions