MaaS Transit: Mobility as a Service Business Solutions

St. Louis Metro Transit Adapts to Changing Mobility Landscape

By 2019, St. Louis Metro Transit faced challenges in retaining its customer base. The proliferation of ride-sharing services like Uber and Lyft, alongside dockless bikes and scooters, led to a ridership decline exceeding 7% within a single year.

Rather than directly competing with these new options, the agency opted for a collaborative approach.

Embracing Third-Party Integration

Metro Transit discontinued its internally developed trip-planning application, originally created with the Trapeze Group. Instead, they directed users to Transit, a third-party application providing mapping and real-time transit information for over 200 cities.

This application uniquely integrated micromobility and ride-hailing services, enabling customers to plan complete journeys, including connections to and from bus stops, or even choose alternative transportation methods.

Expanding Payment Options and Future Plans

In the subsequent year, Metro Transit collaborated with Masabi, a mobile ticketing company, to introduce new payment options on select bus routes.

Currently, the agency is developing an all-encompassing application designed to facilitate the planning and booking of end-to-end trips utilizing trains, buses, bikes, scooters, and taxis. A vendor selection process is underway.

“Our core competency lies in the efficient transportation of large numbers of people via vehicles and the management of mass transit systems,” stated Jessica Mefford-Miller, executive director of Metro Transit. “We recognize that numerous companies excel in software development and can assist us in reaching our customers effectively and simplifying trip planning.”

A Growing Trend in Public Transportation

St. Louis Metro Transit’s strategy is not isolated. A surge of platforms, backed by major corporations such as Uber, Intel, and BMW, are offering technology partnerships to transit agencies aiming to regain ridership.

These “mobility-as-a-service” (MaaS) offerings are presented as vital tools for establishing transit agencies as central components of urban mobility, encompassing booking, payment, and trip planning functionalities.

Declining Ridership and the Appeal of Third-Party Platforms

Transit agencies are increasingly drawn to third-party platforms as they strive to maintain passenger numbers. Data from the American Public Transportation Association (APTA) reveals a decline in ridership and total miles traveled since 2014, including a 2.5% decrease between 2017 and 2018.

The COVID-19 pandemic may further exacerbate this trend, with more individuals working remotely or avoiding crowded public transportation.

The Comparison to Online Travel Agencies

“This concept mirrors that of Expedia, allowing users to compare options from multiple airlines in a single location,” explained Regina Clewlow, CEO of transportation management firm Populus. “Many operators are exploring whether such a system could increase ridership.”

Potential Concerns and the Importance of Equity

However, Mefford-Miller cautioned that prioritizing private growth could potentially compromise the public benefit of transit services.

“Allowing the market to dictate planning independently could result in services accessible only to those with digital devices, bank accounts, or those not requiring special accommodations,” she warned. “Therefore, an equitable and accessible system remains fundamental to our approach, guiding our selection of any tools we implement.”

Key Industry Participants

Within the rapidly evolving landscape of new ventures, several established companies hold significant positions. Cubic Corp., headquartered in San Diego, stands out as a major player in both defense and public transportation sectors.

This firm currently manages payment systems and supporting software for numerous transit authorities, including those in major cities like Chicago, New York, and San Francisco. In January, they introduced a new product line branded Umo, designed to broaden their service portfolio.

The Umo suite encompasses a user-facing multimodal application, a comprehensive fare collection platform, a contactless payment solution, a loyalty program, a back-end management system, and a MaaS (Mobility as a Service) marketplace integrating public and private transport options. Mick Spiers, General Manager of Umo, articulated the aim as facilitating a “connected, integrated journey” for commuters.

Spiers further emphasized their position, stating, “We are uniquely positioned as an impartial, reliable intermediary capable of managing data for journeys centered on user requirements.” He added that the journeys they facilitate are free from any internal commercial motivations.

Moovit, originating as a startup in 2012 and now a subsidiary of Intel’s Mobileye, leverages public transit data and crowdsourced travel information. They assist users in route planning and supply transit data APIs to mobility and mapping companies, including Microsoft’s Azure mapping platform.

Transit shares a similar vision of providing a complete, unified solution. The application serves as the official or endorsed partner for transit authorities in cities like Boston, Los Angeles, and Maryland. It also incorporates data from over 175 metropolitan areas globally.

Demonstrating its growth, the app has begun sharing ridership data with the APTA (American Public Transportation Association).

Even ride-hailing leaders Uber and Lyft, previously considered competitors to public transit, have integrated transit planning features into their applications in select cities. In 2019, Uber initiated a program allowing passengers on Denver’s RTD (Regional Transportation District) to purchase tickets directly through the Uber app.

This functionality has since expanded to over a dozen additional markets. In July 2020, Uber acquired Routematch, an Atlanta-based company providing software to more than 500 transit agencies.

Following the acquisition, Routematch employees were integrated into Uber to collaborate on platform integration. A 2021 white paper from Uber highlighted their commitment to assisting transit agencies in transitioning to “a system that is truly integrated, connected and optimized in a highly agile way,” encompassing microtransit, ridesharing, and micromobility.

Several other companies specialize in delivering mobile and bundled payment solutions to agencies. Masabi, working with cities like Boston, London, New York, and Las Vegas, projected exceeding $1 billion in annual ticket sales in 2019.

Masabi’s JustRide SaaS platform also powers Uber’s in-app ticket purchasing for Denver RTD. Token Transit, a Bay Area startup, has partnered with over 100 agencies, offering a universal fare tool.

Unlike many competitors, Token Transit avoids upfront development costs, instead taking a percentage of each sale. They recently established a collaboration with Google to facilitate fare purchases within the tech giant’s applications.

Founder Zachary Browne stated, “In the long run, I anticipate users will no longer directly utilize our application.” He expressed a preference for functioning as the payment processing layer, handling all interactions between the agency and other applications.

Investment Trends in Mobility as a Service

The expansion of transportation choices by both automotive manufacturers and technology firms – coupled with the acquisition of crucial data regarding future mobility patterns – is attracting investment from a wide range of industries. This includes significant interest in MaaS (Mobility as a Service) and SaaS (Software as a Service) platforms.

Considerable funding has been directed towards key players in this space. For example, Moovit secured $50 million in a Series D funding round in 2018. This round was spearheaded by Intel Capital and its Mobileye navigation unit, with additional contributions from BMW iVentures, Sequoia, and NGP.

Masabi, a prominent payment platform, revealed in February 2020 that it had received investment from Shell. This funding was intended to bolster its MaaS platform and followed a $20 million funding round led by Smedvig Capital alongside MMC Ventures.

The Transit app also experienced substantial investment, raising $17.5 million in 2018. This funding was led by Alliance Ventures and included participation from Jaguar Land Rover’s InMotion Ventures, Accel, and Real Ventures.

A significant industry shift occurred in February with the acquisition of Cubic Corp. by Veritas Capital and Evergreen Coast Capital in a $2.8 billion cash transaction. This deal transitioned Cubic to a privately held company shortly after the launch of Umo.

Government support for innovative mobility is also growing. The Federal Transit Administration’s Accelerating Innovative Mobility initiative provides grants to agencies for investment in emerging technologies and applications.

In August 2020, this program allocated $14 million to 25 projects. One such project received $480,000 in funding for the state of Oregon, specifically to develop a web-based transit data repository.

Potential Benefits for Public Transportation

Historically, transportation sectors operated independently. However, the growing involvement of automakers and other companies in public transit is now being viewed favorably. Integrated MaaS (Mobility as a Service) applications, for example, could encourage individuals to choose buses or trains over personal vehicles due to cost savings, even if these applications are developed by companies that benefit from car ownership.

Data-Driven Service Improvements

The extensive data gathered through comprehensive mobility platforms can also contribute to enhanced transit services. For instance, this data can reveal to a transit agency where an on-demand shuttle could effectively replace a more costly fixed-route bus service.

A report published by the APTA (American Public Transportation Association) in 2018 suggested that agencies with limited budgets should collaborate with private partners to maximize the benefits of data collection and analysis.

Uber's SaaS Approach to Transit

Uber has actively promoted its interest in transit through a SaaS (Software as a Service) model. A partnership with the Transportation Authority of Marin and Marin Transit in California saw Uber integrate transit options into its app.

This integration was then expanded to include microtransit and accessible vehicle services to supplement existing public transportation. The project aims to address transportation needs while providing riders with a familiar booking platform.

Concerns Regarding Equity and Sustainability

However, according to Populus’ Clewlow, there's a risk that private applications, and the algorithms they employ, might not prioritize a city’s commitment to sustainable, equitable, and affordable access for all citizens.

“Cities must fully understand the underlying mechanisms and actively guide development to align with their core values,” Clewlow stated. “The cost of individual rides should demonstrably exceed that of utilizing a high-occupancy bus, and these incentives should be transparently displayed on any platform.”

Potential for Competitive Disadvantage

This concern is heightened when a large corporation like Uber initiates such partnerships. Beyond its ride-hailing service, Uber also operates shared bike and scooter programs following its acquisition of JUMP in 2018.

While these services can complement transit trips in certain areas, a question arises: what if a competitor offers a more advantageous option for the rider?

“Could Uber potentially create a network of services that deliberately excludes competitors, such as CitiBike,” questioned David Zipper, a visiting fellow at Harvard’s Kennedy School, referencing the New York City bikeshare system owned by Lyft.

Uber's Perspective on Integrated Mobility

“As a company focused on mobility networks, our goal is to offer riders a wider range of choices,” explained Christopher Pangilinan, Uber’s head of global policy for public transportation. “We view even occasional use of our services alongside frequent transit trips as a positive outcome.”

The Future of Mobility as a Service

A universally accepted definition of MaaS remains elusive, and the comprehensive, integrated system envisioned for diverse transportation modes and regions is yet to be fully realized.

Ultimately, transportation professionals anticipate the complete dismantling of current operational divisions, empowering each passenger to personalize their travel selections.

According to Spiers of Umo, individuals prioritize different aspects of their commute – cost-effectiveness, speed, environmental impact, or physical activity. A curated journey, tailored to these preferences, could be provided.

The ambition extends beyond simple access through an application; it encompasses service guarantees, ensuring the availability of options like bicycles, ride-sharing services, or trains when required.

Achieving this vision necessitates enhanced collaboration, data exchange, and strategic investments in technological infrastructure.

However, even with these advancements, success in shifting commuters from private vehicles to public transit isn't assured without substantial improvements to service quality.

Zipper emphasizes the limitations of technology, posing the question: “What is more effective in reducing car dependency – a consolidated application, or a dependable transit network operating frequently, coupled with dedicated bicycle infrastructure?”

Note: A previous iteration of this article incorrectly reported that Metro Transit had finalized a vendor selection for its unified transit application.