Traffic of the Future? Can MaaS Help?
This Article was written in Collaboration with martin.schmid and Wisam Shalaby and originally posted on Linkedin.
Typically, when we talk about Mobility as a service (MaaS), we think about using a phone to book and pay for transport. However, the true value of MaaS goes much deeper. It can be used to link public and private transportation services and enable people to choose more sustainable journeys.
Today sustainability isn’t just about idealism, it’s becoming a critical aspect that consumers consider when making a purchase. In an article for the recent World Economic Forum, Christian Klein, SAP’s Co-CEO, wrote that today’s consumers don’t just make decisions based on products or prices anymore, but also on what a company does and stands for.
If transportation businesses don’t adapt to this demand for sustainable and flexible options, they’ll find themselves outcompeted by more digitally savvy companies.
Climate change and the transportation sector
Sustainability is a particularly important issue for the transportation sector. According to the US Environmental Protection Agency (EPA), the largest contributor to climate change is CO2 emitted by fossil fuels. Of total global CO2 emissions, 14 percent comes from fossil fuels burned for road, rail, air and marine transportation. Almost all (95 percent) of the world's transportation energy comes from petroleum-based fuels, largely gasoline and diesel.
To lower emissions and encourage the use of public transportation, many countries are introducing higher taxes on personally owned cars and increasing road-toll fees. Although public transportation remains the most practical and fuel-efficient means of transport, these efforts are not enough.
Multimodal Mobility as a Service
According to Senta and Wisam, the next evolution for transportation services is multimodal MaaS. Multimodal Mobility as a Service is a combination of public and private transportation services within a given region that provides holistic, optimal and people-centered transportation options. It enables end-to-end journeys paid for by the user as a single charge and aims to achieve key public equity and sustainability objectives.
MaaS isn't about bringing you from point A to point B in the shortest time. It's a service that can allow the passenger to choose their means of transport based on aspects that are important to them, whether it be price, speed or carbon footprint. One passenger may prioritize keeping a low carbon footprint even if it’ll take 10 minutes longer to get to point B. In that case, a MaaS service (powered by a frontend app) could propose a journey involving the use of public transportation combined with electric scooters or electric cars that can be picked up and parked at their destination.
With this kind of MaaS, the transportation industry has a single view of the traveler. It can analyze data in real-time and trigger information and incentives to persuade passengers to travel at a different time or suggest taking another method of transportation due to an accident. If the passenger uses the proposed methods of transportation to get to point B, then, he/she will pay a cheaper fare as “one journey” instead of paying a higher fare at each point.
The challenges of multimodal MaaS
If we agree that an effective MaaS service should tap into a wide ecosystem of transit options (bus, electric car, scooter, cabs, train, and ferries), then we need to be able to manage an ecosystem involving multiple companies, systems and partners, and back and front-office supporting systems. We also need to effectively monetize the service.
The transport industry, however, is highly fragmented. Traditional public companies (train, bus, etc.) run on legacy systems, while hi-tech companies (Lyft, Grab, Uber) run on modern applications. The public companies use back-office applications built by niche vendors that have an interest in locking in their clients with highly complex systems. This allows the vendors to charge high fees whenever the client wants to launch a new service.
We know that customers prefer using mobile devices when planning travel, but often current legacy back-office applications do not support this functionality (iOS, Android). Building integrations will be expensive. In addition, travelers need information in real-time, which legacy back-office applications cannot handle at scale. The applications will need to handle several million transactions per day or several thousand transactions per second in real-time.
What SAP offers for multimodal MaaS
For multimodal MaaS, operators need to be able to combine the location services of a mobile app with the right price of the chosen route and ensure purchases can be made directly in the app. This involves several service design implications and associated prices for each of the participating mobility partners, including the attribution of carbon costs for each mode of transport.
SAP Billing and Revenue Innovation Management (SAP BRIM) and SAP Convergent Mediation by DigitalRoute (SAP CM) have solved exactly these issues for several different industries.
For MaaS, SAP BRIM can configure flexible fare logic based on route class, rider type, time of day, ride type, fare promotion logic, and flexible partner settlement logic. It can handle all the settlement needed between the various transit legs for the chosen route. SAP BRIM enables travelers to pay for all modes of transport through any payment channel and any payment method. A mobile app is a preferred channel, but SAP BRIM also supports other channels, such as smart cards.
All the usage data generated by this system is handled by SAP CM by DigitalRoute, a platform born in the complex world of telecommunications. Telecoms use SAP CM to capture, filter and normalize usage data for hundreds of billions of events per day, across hundreds of different technology platforms. Using a vast number of APIs, SAP CM enables businesses to monetize digital services connected to sensors, machines, and devices across multiple industries.
A unified view of travelers in real-time
SAP CM brings two main things to the table for MaaS. First, it brings together all the various means of transport into a unified view. It acts as an umbrella covering bus, train, ferry and ride-hailing platforms to provide one unified, monetizable view. Second, it can do this in real-time, continuously connecting to public and private platforms. The platforms provide the latest and most accurate data about routes, congestion, and carbon footprint scores for parts of the route or the entire route.
The combined real-time capabilities of both SAP BRIM and SAP CM enable the transportation industry to move from a card-centric approach to a real-time back-office centric approach (aka account-based ticketing). SAP CM acquires events in real-time from validators or kiosks, checks the card blacklist and balances, builds the “journey session” to track transfers across transportation operators, sends tap-in events and journey parameters to SAP BRIM to compute the fare, then sends back fare information to the validators or kiosks. Everything is done in less than 200 milliseconds due to the real-time capabilities of SAP BRIM and SAP CM and the launch of 5G that will provide more reliable connections and less latency time.
In a nutshell, SAP BRIM & SAP CM can bring a seamless back-office solution for travelers who want to use different modes of transportation with a mobile app or a transit card. It allows passengers to make better, more sustainable travel decisions and enables transport companies to improve customer experiences.
A good example of how SAP and DigitalRoute enabled a customer to launch MaaS is Tantalum. You can listen to Ozgur Tohumcu, CEO at Tantalum, sharing their experiences from integrating SAP Vehicles Network into its Pay.Car platform, allowing drivers to find and pay for parking and fueling services with just one click. The connected car is taking drivers into the future of mobility. Together, SAP and Tantalum are helping drive that innovation.
Link: SAP and Tantalum are taking drivers into the future of mobility
About Senta Belay
Senta has been working for more than 10 years at SAP as SAP Solution Portfolio Manager for Passenger Rail and Transit Industries. He has deep expertise in rail ticketing, transit open and closed-loop ticketing, fare products, and billing management for multimodal travel for smart cities.
You can reach Senta at senta.belay@sap.com
About Wisam Shalaby
Wisam is DigitalRoute’s Senior Vice President in charge of global alliances and business development. For the last 14 years at DigitalRoute, Wisam has helped enterprises to automate their business processes, eradicate IT-based revenue leakage, and launch new usage-based business models.
You can reach Wisam at wisam.shalaby@digitalroute.com
About Martin Schmid
Martin is an International IT professional with over 26 years of multi-disciplinary/multi-cultural experience in the Telecommunication and Information Technology Industry in Latin America, Europe and USA. During his 20 years in SAP, Martin has participated in large SAP BRIM’s business transformation processes, leading localization, business process design, architecting and gap analysis.
You can reach Martin at martin.schmid@sap.com
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