Submission to Infrastructure Victoria. on Draft 30 Year Strategy

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1 Submission to Infrastructure Victoria Introduction on Draft 30 Year Strategy Mobility as a Service (Australia) Pty Ltd (MaaS Australia) is an Australian company focussed on unlocking the benefits that MaaS brings to the community in Australia and NZ by making MaaS happen in our region. We congratulate Infrastructure Victoria on the publication of Victoria s first draft 30 year infrastructure strategy and welcome the inclusion in the options book of MAS Mobility as a Service. We think the option description used is appropriate and captures at least part of the essence of what MaaS offers to government and the broader community: Support market adoption of mobility as a service (i.e. transport services rendering personal car ownership unnecessary) where this encourages higher vehicle occupancy and increased transport options. This would involve regulatory change to remove barriers to the entry of new market players offering mobility services, creating opportunities for organisations in addition to Uber. 1 What is Mobility as a Service? Mobility as a Service (MaaS) represents a new customer-focussed way for Australians to get from where they are to where they want to be seamlessly, on each and every journey. MaaS revolves around a mobility service that includes smartphone app which is each customers personal mobility assistant. 1 AECOM PWC (2016) Supplement B Option assessments, Assessment 3 p.31 Submission to Infrastructure Victoria Draft 30 Year Strategy Page 1

2 Why does this matter to understanding the future of mobility? MaaS offers an alternative way to get around without any reliance on owning a vehicle. In a more abstract sense, the mobility service is the epitome of understanding transport to be a derived demand. MaaS customers can focus on the destination and the reason for wanting to be there; the travel necessary to get them there is seamlessly taken care of. This functional as a personal mobility assistant is as transformative for those in the community who struggle to get around as it is for those who demand absolute convenience and speed. MaaS and Automated Vehicles Most Australians live in cities, but many live in the suburban portion of those cities. Current transport services in Melbourne are good enough in the inner areas that already owning a vehicle can be a matter of choice rather than necessity. MaaS is a great answer for these people already, but for many other Australians, owning a car can still be a necessity and the MaaS approach works only some of the time. The full potential of on-demand transport services will be realised with the introduction of autonomous, driverless vehicles - offering point-to-point transport options that will expand substantially the number of Australians for whom MaaS provides full mobility without or with reduced car ownership. Therefore, it is important to accelerate the adoption of MaaS / ondemand mobility services before the introduction of autonomous vehicles to ensure smooth transition from legacy, siloed transportation services to the shared mobility ecosystem. Figure 1 MaaS gives customers seamless access to a full range of transport options Submission to Infrastructure Victoria Draft 30 Year Strategy Page 2

3 MaaS gives each customer access to all transport options for each and every journey, including recommending mixed-modal journeys. Customer use of mobility services is therefore likely to be a key element of achieving a more liveable and equitable Melbourne rather than a Melbourne that is burdened by substantial increases in vehicle kilometres travelled. How does the community benefit from MaaS? There is an increasing understanding that the autonomous vehicles may create many possible futures for cities on a spectrum from heaven to hell. The future may be bright from some cities that benefit from improved liveability but not for others that see substantially increased vehicle travel. This is consistent with the language in the KPMG Arup Jacobs modelling report that the potential impacts of autonomous vehicles are the subject of wide debate in the international literature. A range of scenarios were considered to test the likely impacts of autonomous vehicles. Economic modelling of autonomous vehicles often reflects that the vehicle occupant may be able to use their time more productively than at present, but an increase in door-to-door single-occupant trips by driverless vehicles is generally still viewed as undesirable for the broader impacts on cities that result. In the KPMG Arup Jacobs modelling report, the scenarios with very low private car ownership could roughly be perceived as matching the heaven end of the spectrum and scenarios with high private ownership of self-driving cars as hell with the resultant mode shift away from public transport and requirement for increased road space to accommodate increased vehicle kilometres. The impact of driverless transport options is huge, as recognised in your draft strategy: We have commissioned modelling that suggests driverless vehicles and/or transport pricing could dwarf the effect of any single major transport project. The importance of achieving the best from this disruptive change is therefore clear. We strongly believe that a well-functioning competitive mobility ecosystem that includes personal mobility assistant services pushes the outcome for cities closer to heaven than hell. The first full-featured mobility subscriptions using a personal mobility assistant smartphone app launched to paying customers in Helsinki in October These Whim 2 packages make clear both the multi-modal nature of this approach along with the inbuilt incentive for mobility service providers to encourage increased use of public and active transport. Figure 2 Initial Whim package offerings in Helsinki 2 Mobility as a Service (Australia) is an investor in MaaS Global, the operator of Whim Submission to Infrastructure Victoria Draft 30 Year Strategy Page 3

4 We believe that the benefits of MaaS should be assessed as part of this difference between scenarios for the future of cities that includes driverless vehicles, with MaaS a significant contributor to achieving scenarios that result in a more liveable and equitable Melbourne. We therefore strongly disagree with the characterisation of MaaS in the option book as: ride hailing, carpooling, the use of mini-buses and coaches providing either on-demand or fixed schedule services an example would be the use of luxury coaches offering a higher standard of commuter service aimed at business people. 3 Such diversified transport offerings are indeed part of a healthy mobility ecosystem that includes MaaS, but individual transport offerings (or even a collection thereof) cannot capture the essence of the much broader benefits that MaaS can provide the community. MaaS must be considered as a total solution that provides equivalent freedom of mobility to car ownership, but without the need to own a car. In addition to the benefits from a more positive future use of driverless transport, we believe that MaaS offers the potential to harness the workings of competitive markets to deliver consumer benefits. Figure 3 MaaS Australia s representation of the mobility ecosystem In this model of the mobility ecosystem there are three layers mobility services, transport services and infrastructure. For this discussion, we will focus on the top two layers, although noting that data from mobility services is one of the most valuable forms of big data for the planning and operation of transport infrastructure. We believe that competition is valuable in each of the mobility services and transport services layers. Competition in the mobility services layer encourages us and others to continuously work to offer the best mobility solutions for each and every customer. Achieving this would require us to continuously work with transport service providers to access the best offerings that they can provide. We would be motivated to reward customer-focussed innovation in transport services and transport service operators would be motivated to innovate and achieve continuous improvement to remain competitive. 3 AECOM PWC (2016) Supplement B Option assessments, Assessment 3 p.31 Submission to Infrastructure Victoria Draft 30 Year Strategy Page 4

5 We believe seeking the appropriate market structure for mobility services to be a logical extension of the action in the draft strategy to support the establishment of an effectively regulated market for the roll-out of automated vehicle technologies. What is the evidence base for MaaS? There is only a limited evidence base currently available for MaaS as there are currently only forerunners of future full-featured MaaS offering that have strong customer utilisation. The results that do exist are very positive, despite the limitations of the partial early-stage implementations they are derived from. The UbiGo travel broker service in Gothenburg in 2014 reported very high user satisfaction, with 79% of participants definitely wanting to continue using the service and a further 18% probably wanting to continue for a total of 97% wanting to continue. 43% of participants reported changes in mode choice, 34% in approaches to pre-trip planning, 21% reported changes to destinations, duration and trip chaining and 21% a chance in their amount of physical exercise 4. The Vienna Smile pilot was also run in 2014 and also recorded positive results: 48% of the surveyed pilot users stated increased usage of public transportation; 21% reduced the usage of their private car 10% increased the use of bike-sharing; 4% increased the usage of e-car-sharing; and 4% increased the usage of e-bikes 5. Assessing the full, future impacts of MaaS can only be achieved through modelling, using assumptions informed by results such as from these European pilots. This reliance on modelling is of course also true for almost every transport initiative, be it a new metro line or the impacts of driverless vehicles. We recognise that this is a developing area that has substantial potential impacts on the future of transport in our cities and hence our cities themselves. As such, we would be pleased to work with Infrastructure Victoria and other Victorian Government departments and agencies to further explore the potential impacts of MaaS. Concluding remarks We again welcome Infrastructure Victoria s inclusion of MaaS within the draft 30 year strategy and the recognition that policy and regulatory work is required within the zero to five year period. We do not agree with the assessed impact of deferring such action; the assessment of the impact of such delay seems to have been based on a view of MaaS as a collection of new transport services rather than a new model of mobility. The impact of delay must instead be seen in the context of MaaS being a key differentiator in achieving improved liveability and equity in a city with 4 Sochor J, Strömberg H and Karlsson M (2014) The Added Value of a New, Innovative Travel Service: Insights from the UbiGo Field Operational Test in Gothenburg, Sweden, International Conference on Mobility and Smart Cities, Rome 5 Smile Mobility (2015) Pilot Operation, Submission to Infrastructure Victoria Draft 30 Year Strategy Page 5

6 driverless vehicles. In that sense, this recent remark by McKinsey sums up well the impact of deferring action: Urban-policy decisions made today will determine how mobility and car usage evolve in the next 10 to 20 years. 6 Further to this important policy and regulatory work, we believe there to be strong value in undertaking targeted actions for government and industry to work together to demonstrate and pilot MaaS in Victoria. This is critical to support readiness of Victorian industry for MaaS as it provides invaluable hands-on experience and will help Victoria to be home to mobility disruptors and adaptors, rather than only to the disrupted. A final note MaaS and dynamic transport pricing We note that one of your top three recommendations was: Introducing a comprehensive transport pricing regime to manage demands on the network. It is outside the scope of this submission to explore transport pricing regimes, however it is worth noting that MaaS can help customers deal with the complexity of pricing regimes regardless of whether they are road pricing regimes or transport service pricing regimes (including surge and airline style pricing). Two examples of how a personal mobility assistant service can make the difficult easy for customers for dynamic pricing are: Displaying the full price (or subscription usage impact) upfront of each option to get a customer to their destination; and Providing personalised recommendations to individual customers as to how they can change their travel patterns to reduce total spending. 6 McKinsey Center for Business and Environment (2016) Urban mobility at a tipping point, p.14 Submission to Infrastructure Victoria Draft 30 Year Strategy Page 6