The smart transport sector is at the beginning of a serious industry boom, complete with new technologies, services, and players. Despite the disruption in the industry experienced during the COVID-19 pandemic, Mobility as a Service in its many forms is expected to take off substantially between 2020 and 2027, pulling in billions of dollars into the market, according to new market research and a study conducted by Allied Market Research.
In this brief guide, we’ll explore exactly what Mobility as a Service entails and the details of the seven-year forecast for the industry.
Understanding Mobility as a Service
Mobility as a Service or MaaS refers to the integration of technology and transport services, specifically in the context of digital applications. Well-known MaaS services include Uber, Lyft, public transportation applications, flight apps, etc. Micromobility, a form of smart mobility, is also becoming quite popular in the scope of MaaS and refers to the digitization of services related to small vehicles like bicycles and electric scooters.
There are many factors involved in the projected growth of the industry. Particularly, consumers are pushing for better transport infrastructure and one-stop solutions to meet daily transportation service needs. Just as well, there is an ever-increasing number of OEMs or original equipment manufacturer. There is also a serious need to improve how traffic is organized, especially through digital traffic and parking solutions. As mobile application adoption continues to rise, and the need for rideshare apps, carpooling apps, and autonomous vehicles grows, it only makes sense that MaaS will increase in market value. Plus, today’s consumer is less interested in the costly need to own their own vehicle compared to just a few years ago. MaaS provides a solution that could radically change how we travel on small and large scales across the globe.
There have also been government initiatives to implement MaaS on a city-wide scale, particularly when it comes to public transportation access. It’s no surprise that this industry is expected to boom in the next seven years– but exactly how well will it do? Is the industry worth investing in, and how could it survive COVID-19? Let’s take a look.
How MaaS Will Expand Throughout the 2020-2027 Forecast Period
According to a recent news release and research study titled “Smart Mobility Market to Garner $70.46 Billion by 2027” from Allied Market Research, we can expect MaaS to not only remain stable but to explode in popularity in the next seven or so years.
In 2019, the smart mobility market reached over $34 billion worldwide. According to the study, that revenue is expected to expand to $70.46 billion by 2027, which would register a CAGR of 20.2% from the year 2020 to 2027. There are a number of reasons why this has occurred. To start, on-demand transportation (such as Uber, Lyft, etc.) and government push for smart city development likely were the main players in this industry boom. As transport systems continue to be adopted across the United States, more growth opportunities will likely occur in the market.
It may be hard to believe that MaaS could face such drastic economic success, especially since the industry suffered significantly during the COVID-19 pandemic. However, the study accounts for this bump in the road.
“Rising trend of on-demand transportation across the globe drives the growth of the global smart mobility market,” reads a summary of the study from GlobeNewswire, “However, the growth of the smart mobility market has been affected negatively during the COVID-19 pandemic as on-demand transportation services were halted amid lockdown. Government initiatives regarding the development of smart cites have been postponed to curb the spread of coronavirus. Thus, the demand for smart mobility has declined during the Covid-19 pandemic.”
Once the pandemic has been sufficiently placed under control, the demand for smart transportation is expected to increase once again, yet the positive turn may not fully manifest before 2022. Meanwhile, global economies have already registered the need to create and replace jobs in the wake of the pandemic’s record-breaking unemployment, MaaS presents a unique opportunity for incremental yet steady growth of the flexible “gig” workforce to earn wages under the independent contractor model.
Back in 2019, the largest share contributor was traffic management and accounted for over one-fourth of the whole share. According to the research study, traffic management is expected to be one of the biggest dominants in the seven-year forecast period, accompanied by parking management, which is expected to have a CAGR of 21.9%.
North America will likely contribute the highest portion in the projected future, as it accounted for approximately one-third of the total market share in 2019. The leading market players that are predicted to have a major presence during the forecast period include Excelfore Corporation, Cisco, Ford Motor Company, MAAS Global Oy, Uber, Lyft, Careem, Addison Lee, Ingogo, Easy Taxi, Toyota Motor Corporation, TomTom International, to name a few.
Some populous regions where MaaS could have high demand may not be able to realize the projected growth simply due to lack of stable internet, especially in parts of Africa and Asia. This could mean partnerships between smartphone providers, their local internet networks and MaaS providers would be necessary to fulfill those opportunities.
Variables exist in both the advantages and challenges of MaaS growth. In its recent study, Verified Market Research projects that Mobility as a Service could reach $271 billion by 2027, growing at a CAGR of 23.7% between 2020 and 2027. The research collected here also points to the need for seamless connectivity to allow all stakeholders to utilize a MaaS ecosystem. The higher CAGR forecast may point to their belief that this stumbling block can be overcome quickly. In contrast to Allied Market Research’s report, this study predicts Europe, rather than North America, will be responsible for the majority share of the MaaS market over the next 7 years.
“Owing to new opportunities arising in the transportation sector, so as to improve customer travel choice in transport service, there is an enhancement in Mobility as a Service market.” The study states, “the proliferation of the large number of OEMs into the MaaS market, rapid urbanization leading to increased pressures on the transportation infrastructure and demand for a one-stop solution fulfilling seamless transportation service needs are some factors driving the MaaS market. In addition, due to its instincts in mobile applications that operate on a digital platform offering end-to-end trip planning, electronic ticketing, and payment services across the public and private sector, it is gaining attention which is boosting the growth of this market.”