{"id":8898,"date":"2020-10-22T08:53:43","date_gmt":"2020-10-22T15:53:43","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=8898"},"modified":"2020-11-05T10:28:16","modified_gmt":"2020-11-05T18:28:16","slug":"the-rise-of-maas-and-other-automaker-business-models","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2020\/10\/the-rise-of-maas-and-other-automaker-business-models","title":{"rendered":"The Rise of MaaS and Other Automaker Business Models"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”8899″ img_size=”full”][vc_column_text]The entire automotive industry is under a siege of shakeups, and one of the biggest game-changers could be the switch to the Mobility as a Service (MaaS) business model.\u00a0<\/span><\/p>\n

Traditionally, original equipment manufacturers (OEMs) have focused their fleet operations on private ownership or leasing. Now, the automotive industry is moving from a strict product-based business and moving into the service industry as automakers merge the growing capabilities of <\/span>autonomous vehicles<\/span><\/a> (AV) with changing consumer demands, societal norms and urbanization. This new business model is calling OEMs and auto suppliers to make dramatic changes to their strategy to stay relevant in tomorrow’s auto industry.\u00a0<\/span><\/p>\n

The 5 Drivers of the Mobility as a Service (MaaS) Business Model<\/span><\/h2>\n

The automotive industry is expected to nearly double by 2030, with the new MaaS business model leading the way for that $3.2 trillion growth. Services such as ride-sharing, Robotaxis, autonomous public transit, truck platooning, and autonomous delivery will begin to take over the automotive market as the demand for private consumer ownership plummets in urban areas. We’ve found the following five factors in interviews and research to be the new MaaS business model’s primary drivers.\u00a0<\/span><\/p>\n

Urbanization<\/span><\/h3>\n

Cities will be the first places to witness the switch to the MaaS model. Cities are already known for congested traffic, high emissions, low air quality, and limited, but high-cost parking. Fifty percent of the global population already resides in cities, and more people are continuing to move into metropolitan areas, so car ownership is becoming increasingly challenged. Because of this, urban residents are turning to public transit and MaaS as a more viable alternative to vehicle ownership.\u00a0<\/span><\/p>\n

Congestion<\/span><\/h3>\n

Swelling populations are overwhelming road infrastructures, which has caused an uptick in vehicle accidents, air pollution and gridlock traffic jams. Commuters spend an accumulative 5.5 billion hours in traffic each year in the United States alone. Autonomous public transit, Robotaxis, and ride-sharing vehicles will help reduce traffic congestion (and the air pollution and accidents that go with it) by transporting more people per vehicle and creating smarter, more efficient routes.\u00a0<\/span><\/p>\n

Society<\/span><\/h3>\n

As millennials and Generation Z take over the consumer market, the demand for private vehicle ownership could decrease. Driver’s license ownership among 20 to 25 year olds has declined by 20 percent since 1980, and nearly 10 percent of millennials state they have no desire to drive. Instead, these consumers prefer to purchase transportation services and commute as they need it, rather than committing to a large investment and car ownership responsibility.\u00a0<\/span><\/p>\n

Digital Accessibility<\/span><\/h3>\n

Social and digital trends show that consumers are losing interest in vehicle ownership and are instead finding value in the affordability and accessibility of app-based ride services. The rapid growth of MaaS apps like Uber and Lyft demonstrates the demand for digital <\/span>ride-sharing<\/span><\/a> services and the power of being first in the MaaS race. And these trends aren’t reserved for mobile users in North America and Europe. Statistics show that 71 percent of the world’s population now has access to a mobile phone.<\/span><\/p>\n

Cost<\/span><\/h3>\n

MaaS applications mixed with autonomous driving capabilities eliminate the human element of a taxi service, which drives the cost of transportation down. Estimates suggest that an AV e-hailing service could cost less than $1 per mile, a third of a taxi’s price, and $0.80 less than e-hailing services with human drivers, like Uber or Lyft. The companies that enter the AV e-hailing service first will have a significant competitive advantage in revenue and cost as they establish their brand and trust with consumers.\u00a0\u00a0<\/span><\/p>\n

The 3 Emerging Business Models<\/span><\/h2>\n

As the new automotive technology and service components merge, we see the rise of three distinct business models: manufacturing, fleet development and premium private ownership. OEMs like GM, Tesla, Rivian, Daimler and FCA are already positioning around one of the three models, and we can see that other automakers are quickly doing the same.\u00a0<\/span><\/p>\n

Vehicle and Fleet Operations<\/span><\/h3>\n

This business model focuses on creating a complete package of Robotaxi vehicles and the technology to power them. Tesla is currently working on designing and developing a fleet of autonomous cars operated by Tesla technology. This service will compete against public transit and current MaaS companies like Uber and Lyft. However, unlike their MaaS competitors, only Tesla vehicles would be permitted as part of its fleet, making all vehicles operable by the same software and technology. This service, referred to as the “Tesla Network,” could be the first enterprise built on this model to arrive on the market.\u00a0<\/span><\/p>\n

The “Boeing” Model<\/span><\/h3>\n

With big names like Google (Waymo) and Amazon (Zoox) entering the automotive scene, the Boeing Model may be a good business model for automakers who want to stay relevant in the new market without completely straying from their current strategy. Instead of creating a complete “Network” like Tesla, automakers choosing the Boeing Model path will focus their energy on designing, manufacturing, and servicing a fleet of Robotaxi vehicles that will work with the MaaS technology company. An example of this model is FCA supplying vehicles to Waymo’s Robotaxi fleet.\u00a0<\/span><\/p>\n

Premium Car Builder<\/span><\/h3>\n

While many consumers will quickly and openly adopt the new MaaS business model, there will still be a market for premium, luxury vehicles that aren’t attached to or operated by a central program like Tesla’s model. Future car owners will be wealthy and will likely live in suburban or non-metropolitan areas. Automakers providing AV alternatives will be able to charge on premium prices to reflect the quality of the parts, <\/span>software<\/span><\/a>, features, and private car ownership exclusivity in a ride-sharing market. Daimler and BMW are settling on this model since stopping Robotaxi activities last December.<\/span><\/p>\n

How Auto Companies Can Adapt to these Changes<\/span><\/h2>\n

Auto industry participants who wish to survive the disruption of MaaS and autonomous vehicles will need to stay alert to changing trends. This will require them to gain a deeper understanding of exactly how their operations will be affected and build a long-term strategic plan to secure them a space in the new <\/span>automotive<\/span><\/a> industry. Auto suppliers who choose to ignore the emerging trends of autonomous technology and services will miss critical opportunities and quickly find themselves irrelevant and out of business.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_single_image image=”8899″ img_size=”full”][vc_column_text]The entire automotive industry is under a siege of shakeups, and one of the biggest game-changers could be the switch to the Mobility as a Service (MaaS) business model.\u00a0 Traditionally, original equipment manufacturers (OEMs) have focused their fleet operations on private ownership or leasing. Now, the automotive industry is moving from a strict […]<\/p>\n","protected":false},"author":60,"featured_media":8899,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,199],"tags":[7,127,237,1415,1417,697,1420,1414,621,1413,1418,1416,1419],"class_list":["post-8898","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-manufacturing-trends","tag-automotive","tag-automotive-suppliers","tag-autonomous-vehicles","tag-business-models","tag-consumer-demands","tag-disruption","tag-e-hailing-service","tag-maas","tag-mobility","tag-mobility-as-a-service","tag-oems","tag-robotaxis","tag-urbanization"],"yoast_head":"\nThe Rise of MaaS and Other Automaker Business Models | QAD Blog<\/title>\n<meta name=\"description\" content=\"The automotive industry steps into service industry business models like MaaS and adapts autonomous vehicles (AV) to fit 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Eichenberg","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.qad.com\/blog\/wp-content\/uploads\/2018\/04\/Paul-Eichenberg_avatar-96x96.jpg","url":"https:\/\/www.qad.com\/blog\/wp-content\/uploads\/2018\/04\/Paul-Eichenberg_avatar-96x96.jpg","contentUrl":"https:\/\/www.qad.com\/blog\/wp-content\/uploads\/2018\/04\/Paul-Eichenberg_avatar-96x96.jpg","caption":"Paul Eichenberg"},"description":"Paul Eichenberg has had 25 years working with Fortune 500 automotive suppliers, most notably eight years as the global VP of Corporate Development and Strategy for Magna Powertrain & Magna Electronics. As the Chief Strategist, Paul oversaw all strategic planning, product management and merger and acquisition activities. During his tenure at Magna, Paul successfully repositioned the business to focus on technologies for the optimization of the internal combustion engine, EV\/Hybrid technologies, ADAS, and autonomous vehicles. Paul manages his own automotive consulting firm called Paul Eichenberg Strategic Consulting. Paul\u2019s clients include hedge funds, investment banks, private equity investors and automotive suppliers.","sameAs":["https:\/\/chief-strategist.com\/"],"url":"https:\/\/www.qad.com\/blog\/author\/paul-eichenberg"}]}},"_links":{"self":[{"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/posts\/8898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/users\/60"}],"replies":[{"embeddable":true,"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/comments?post=8898"}],"version-history":[{"count":3,"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/posts\/8898\/revisions"}],"predecessor-version":[{"id":8935,"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/posts\/8898\/revisions\/8935"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/media\/8899"}],"wp:attachment":[{"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/media?parent=8898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/categories?post=8898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.qad.com\/blog\/wp-json\/wp\/v2\/tags?post=8898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}