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Future of mobility is accelerating

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How we own, use and pay for cars is changing fast. 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 (MaaS).

Although not yet a household term, MaaS is gaining traction as perhaps the largest transformational change to happen to the motor vehicle industry. MaaS is 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 servicesand commuters in New Zealand’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, MaaS is likely to be much much more. Increasing urbanisation and traffic congestion is another factor hurrying along the introduction of MaaS. Already more than half the world’s population lives in a city and that figure is projected to grow to around 70% by 2050. Increasing urbanisation and the growth of mega-cities such as Shanghai and Tokyo may lead to less car ownership and greater use of ride-sharing schemes.

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 €249 (NZ$428) 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.

At Toyota New Zealand, we have upgraded our business model to cope with this transformation, and Toyota Financial Services has invested in Cityhop, New Zealand’s largest car sharing business, and other MaaS related technology platforms.

Toyota New Zealand also sees MaaS as a pathway to move towards a low emission economy supporting the reduction of global C02 emissions. We’ve set significant targets in emission reduction and have made low carbon emission vehicles more widely available for our customers. Our steps in working with the Government towards clean car standards and discounts also aligns perfectly with the principles of MaaS where we can increase the utilisation of more efficient vehicles.

A key part of MaaS is the concept of a car subscription service. Initially we see car subscription services as a natural extension to leasing, particularly to fleets. 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.

In Japan, a driver signing up for Toyota’s Kinto service 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.  At the Tokyo Motor Show last month, Toyota didn’t even feature a car on our stand, the focus was on a future of connected services and autonomous vehicles – all the gadgets we’ve been reading about are now becoming a reality.

But does that mean Toyota doesn’t see a future of personal vehicle ownership? While we do see a decline in ownership in some developed markets and in large urban areas where new MaaS technologies best suit, we see a future where all forms of mobility will need to co-exist.

Just as the demise of the horse and cart did not see the end of horse riding for pleasure, the introduction of autonomous cars and car-sharing won’t mean the end of driving a car for pleasure so ride sharing might also be about where you keep the Horse and the Toyota Supra between weekends.