Cross-border transfer of a systemic Mobility-as-a-Service -related innovation

During the project, we investigated the transferability of MaaS-related on-demand shared taxi services from one cultural and geographical context to another using an in-depth case study method. Our target region of analysis for the transfer is an area known as Growth Corridor Finland (GCF), a region stretching from Helsinki to Hämeenlinna, Tampere and Seinäjoki region as a string of cities.

There is empirical evidence of transferring systemic innovations from one context to another. For instance, Schaffers and Turkama (2012) explore the transferability of systemic innovations in home care and independent living, energy efficiency, manufacturing networks and citizen participation. According to their findings, the living labs approach can be used for cases that call for the user-behaviour transformation or business-model innovations. There is also knowledge about new MaaS concepts and how they change the mobility behaviour of the users, and some indications of the determinants of a successful business based on MaaS pilots (Karlsson, Sochor & Strömberg, 2016). However, there is not yet clear evidence of the main success factors of full-scale MaaS concept nor how to transfer systemic MaaS innovations from their original context to new markets when the whole transport system may be affected.

Our primary research question was to identify the conditions under which the systemic MaaS innovation can be transferred from one cultural and socio-technical context to another. In particular, we examined what kinds of elements and approaches are required in this transfer. We also investigated, how the socio-technical framework of Geels (2012) can be applied when analysing the transferability of the MaaS solutions from one cultural and socio-technical context to another.

To provide insights into the transferability of the ISTmobil concept to Finland, we compared it with three other similar kinds of on-demand transport services: Kutsuplus, Kyyti and UberPOOL. Kyyti is a Finnish mobility service that provides door-to-door transport by combining different passengers’ mobility needs most optimally by shared rides. UberPOOL is a service where Uber driver picks up and drops off multiple riders going in the same direction. All these services are based on smart software and route optimisation. These services have a digital interface linked to the public transport. Therefore, they complement the public transport rather than compete with it. These services are somewhere between the traditional public transport and taxi services both in their flexibility and pricing scheme. However, there are also differences between these services. The main characteristics of the services are summarised in Table 1.

Table 1. Comparison of different on-demand shared mobility services.

Service: ISTmobil Kutsuplus Kyyti UberPOOL
Dynamic capacity yes no yes yes
Market-based subsidized subsidized yes yes
Operator Private

start-up

Regional transport  authority Private

start-up

Private

start-up

Pricing model fixed fixed dynamic dynamic
Reduced price for flexibility no no yes Yes
Only professional drivers yes yes yes no

In our classification, the dynamic capacity means that the number and size of vehicles used are flexible instead of being fixed. Kutsuplus used a fixed number of dedicated vehicles for their service. ISTMobil and Kyyti use ordinary taxis as the means of transport. Their number is determined by the demand-driven capacity expansion logic. The capacity of UberPOOL is based on market-pull where the number of vehicles is determined by the end customers’ demand. In our classification, ‘market-based’ means that the service is not subsidised by the municipalities or other authorities. ISTmobil is subsidized by the municipals and hence is considered to be a part of the public transport system. Kutsuplus was a testing platform for the Helsinki Regional Transport Agency and heavily subsidised while Kyyti and UberPOOL are market-based services. Except for the regional transport agency operated Kutsuplus, all the other services are operated by private start-ups.

ISTmobil has a fixed pricing of four euros for each starting five kilometres. Kutsuplus had a specified pricing per the length of a trip. Kyyti has a dynamic pricing according to the market demand. In UberPOOL, the price is dynamically determined by the markets. In all services, the price of the ride is known in advance. In our classification, price reduction on flexibility means that a customer gets a discount, if he or she accepts a little longer and uncertain travel time. Kutsuplus and ISTmobil models do not have a price reduction as a result of flexibility while UberPOOL has some price reduction on flexibility. However, the concept of flexibility is a more essential feature in Kyyti to reduce the ride cost by pooling more passengers. This is done by offering customers three different service categories whereby the price and travel time will vary accordingly.

From the viewpoint of transport and commuting, there are many similarities between the Growth Corridor Finland and Korneuburg, where ISTmobil started its operations. Both areas have good railway and highway connections with large cities nearby, and a high number of passengers commuting daily in both regions. Therefore, GCF is geographically and demographically similar enough for the comparison and analysis.

The question remains how the taxi firms in Finland would consider the change. Currently, both municipalities and governmental organisations have an obligation to provide a reasonably priced or even free rides for many customer groups with special needs. As previously there have not been other alternatives available, taxis have been the most responsible choice for these transport needs. As a result, approximately 80 % of the taxi trips in rural areas are paid either by the municipalities or the Finnish Social Insurance institution KELA. If a service like ISTmobil would enter the Finnish market, it could decrease the number of these taxi rides by pooling customers. Potentially the service could also reduce the number of buses driving nearly empty in rural areas and could collect passengers to hubs for further bus and train connections, thus indirectly increasing the use of public transport.

Municipal authorities and their policies in Finland have a significant role as an enabler for the demand responsive service concepts to succeed. If the present operations continue – i.e., keeping the existing bus lines and timetables and supporting the current policy of subsidised taxi rides – demand responsive services such as ISTmobil concept is unlikely to get enough passengers. As buses are also heavily subsidised in the rural areas, the question is what kinds of subsidizing policies should apply also to the on-demand services. Probably the most challenging aspect in the change is to consider the public transport in another way: if there is a last mile solution available, how should it change the ways public transport and the routes are organized.

The market potential is another interesting issue. First, we analysed the population density in both areas and figures below illustrates this density in the GCF and Korneuburg district.

pop_density_GCF
Population density and main railways in Growth Corridor Finland (GFC)

 

pop_density_korneuburg
Population density and main railways in Korneuburg district, Austria.

There is a certain window of opportunity regarding the number of customers and population density that should be reached by the service. In the urban city areas with a high population density, high capacity public transport is probably a better solution. On the other hand, if the rural areas have a too low population density or there are no clear transport connection hubs, a demand responsive concept may not have enough customer base. Also, as public transport has already been quite limited in some rural areas, many families have two private cars in their household, which may reduce the market potential.

There are differences in the size and population density between the areas. However, the GCF includes several regions that have different population densities within the municipalities. If the picture of the GCF on the left would be shown in detail, there could be found similar areas around the cities and municipalities (e.g. Hyvinkää, Hämeenlinna, Nurmijärvi, Riihimäki), which could adopt the service concept of ISTmobil for their outskirts and neighbouring areas. The city centres and their bus and train stations could then serve as connection hubs for further transport needs. This is also the way, how ISTmobil service is used in Korneuburg area. On the other hand, within the Growth Corridor area, there are some rural areas where the population densities and the number of potential customers are too low and the difference with these areas is that population is more clustered into villages in rural areas in Austria, while the locations of houses in Finland are highly dispersed in the countryside.

The result of our analysis indicates that there are many different aspects to be considered. Even if the legal and technical aspects would fit, there are many issues related to the potential market size and the local transport subsidising policies. The conclusion is that the socio-technical framework of Geels (2012) is a good starting point for analysing the applicability of a new MaaS-related service in another cultural and geographical context. When applied thoroughly, it shows quickly the similarities and dissimilarities between the regions, and hence, the aspects that are relevant to focus on in a more detailed analysis. However, the framework is rather burdensome to use. Therefore, new complementary tools and methods are required to analyse the cross-border transfer and successful adoption of MaaS-related innovations.

Next: Design principles for sustainable mobility solutions

 


References

Geels, F. (2002). Technological transitions as evolutionary reconfiguration processes: a multi-level perspective and a case-study. Research Policy, 31(8/9), 1257-1274.

Geels, F. (2012). A socio-technical analysis of low-carbon transitions: Introducing the multi-level perspective into transport studies. Journal of Transport Geography, 24, 471-482.

Karlsson, M., Sochor, J. & Strömberg, H. (2016). Developing the ‘service’ in Mobility as a Service: Experiences from a field trial of an Innovative travel brokerage. Transportation Research Procedia, 14, 3265-3273.

Schaffers, H. & Turkama, P. (2012). Living Labs for cross-border systemic innovation. Technology Innovation Management Review, 2(9), 25–30.

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