What SaaS tells you about MaaS

Software-as-a-Service (SaaS), or “on demand” software, has transformed the IT sector, allowing customers to defer or diminish spending on hardware, systems, and large up-front licenses thanks to a subscription model of licensing and delivery. SaaS solutions could scale easily, in sharp contrast to on-premise data centres. Customers could implement software quickly and easily, whilst most maintenance responsibilities were shifted to the vendor. This led to major cost savings and allowed IT organisations to redeploy talent away from low-value-added software maintenance tasks to more strategic IT development. Many of the costs and hassles of installation, data security, and operational resilience were removed.

In recent years, proving everything old is new again, Mobility-as-a-Service (MaaS), or “on demand” transport, has entered the vernacular. Described as a shift away from personally owned modes of transportation and towards mobility solutions that are consumed as a service, this approach enables public and private transportation services to be accessed through a single portal. This unified gateway creates and manages the trip, where users can pay with a single account. Typically, people use a mobile phone application. Innovative new mobility services include ride-sharing and e-hailing, bike-sharing, and car-sharing services as well as on-demand "pop-up" bus services.

The shift has been prompted by new technologies such as Connected And Autonomous Vehicles (CAVs) and electric vehicles. As a result, policy makers are rapidly transforming their regulatory approach to incorporate what transport may look like in the near future.

Like SaaS, the benefits of MaaS are linked to reduced cost of ownership (e.g. vehicle costs, fuel costs, parking charges, train ticket admin fees and even the time taken to book a journey) and scalability of service. It can improve ridership habits and transit network efficiency by only giving customers what they need when they need it.

In 2016, the Transport Affordability Index introduced by the Australian Automobile Association found a two-car household in Sydney faced transport costs of AUD419 per week, or around AUD22,000 a year. MaaS has the potential to decrease customer costs, improve shared transport utilisation, reduce city congestion, and reduce emissions as more users rely on public transit or electric, autonomous vehicles. MaaS equally has many benefits for the business world – understanding the Total Cost of Business Mobility could help decision makers in the corporate world save by analysing data and costs attributed to "business mobility” within their travel policies, fleet management and expense claims.

So what did SaaS teach us that might lead to better MaaS outcomes? Here are three key learnings:

1. Work out a payment model that attracts customers, not punishes them

2. Training and change management will become more important

3. It is all about the customer experience

Applying these to MAAS:

1.    Payment and pricing

• Try before you buy models help customers get comfortable with the service before fully adopting it, similar to a free trial of a new software product.
• Transport providers can also provide base functionality for free, and sell the value of the upgrades.
• Surge pricing and ambiguous fees and charges punish the customer, whilst also creating confusion. No-one wants to read the fine print.
• Subscriber based payments can reward loyalty by augmenting pay-as-you-go regimes past a certain spend. Ever enjoyed a monthly or yearly renewal fee on your antivirus software?
• Up-front long-term commitments can be a barrier to entry.
• The beauty of the MaaS model is in retention – focusing on low prices and high volume. Over time, it should  cost less and less to service a customer, and you should earn more profit from them over time as well. A new customer should be the start of a new relationship.

Our advisory and transport planning teams are helping our clients understand the total cost of mobility, so they can set pricing models that match to the benefits customers can expect to receive”. Recently, GHD presented on the cost of mobility for various transport modes including autonomous and electric vehicles at the South East Australian Transport Strategy (SEATS) and Bus Industry Confederation (BIC) forums.

2. Training

The frequency and quantity of service updates originating from MaaS may exceed some customers’ ability to assimilate them. Preparing customers for rapid and ongoing change, as well as establishing a change-control program for them, is critical to launching and maintaining MaaS.

Have you ever struggled with the constant flow of functional upgrades in Windows or Excel, or on your mobile phone? Customers engage with your product for a wide variety of reasons. Each customer has their own unique needs and priorities. Customers therefore need to know what is changing, why it’s changing, when it’s changing, how it will affect them and where to go with questions.

Adoption of the service needs to occur as quickly as possible. The longer it takes, the more likely they won’t use it effectively or at all. Keep your existing customer base engaged and up-to-date with the latest service improvements.

3.    Customer experience

The following model considers how to engage customers through the MaaS lifecycle:

Acquisition: a picture says a thousand words, and so do the first seven seconds of someone landing on your website, or entering your transportation device. What is your customer’s first impression?

Activation: providing your clients with a great user experience is essential if you expect people to sign up with you. stick around and reduce churn. Learn to use the exact words that your customers use when activating their account.

Retention: make it really easy for them to connect with you via different channels including phone, email, app and chat. Think of ways to go viral by building a fan base instead of a user base. Your goal should be to create a best-in-class service for the customers who are the right match. Customers expect service updates that do not interfere with existing offerings. Think of what happens when you update your phone, only to lose your contacts.

Monetisation: customers expect new features and capabilities to be added often, and are happy to pay for the uplift in service. Any time there is a disruption in service, customers expect prompt notifications and ongoing status updates. Continue to communicate messages that demonstrate your understanding of their needs now and into their future, and reinforce the relevance of upgraded services in meeting those needs.

Referral: How do you get your existing customers to create new ones?

GHD’s transport modelling team enables clients to understand the current customer experience, and where it may be improved. Recent examples include helping a council scope the use of autonomous vehicles within the CBD, and assisting a university to devise its shuttle masterplan to identify the best modes for transporting students efficiently around the campus.

There is plenty we can learn from the history of SaaS to shape the future of MaaS. Consider how your MaaS offering can enhance customer value through developing better pricing models, training, and customer experience as part of your business model.

Colin Dominish is GHD’s Market Leader Transport, Sydney.

GHD will be sponsoring the Committee for Economic Development Australia (CEDA) NSW Transport Series again in 2018. Join Colin and the GHD team at the upcoming “The Future of Mobility” event 12-2pm on Friday 23 March to hear how MaaS is currently being implemented in Australia and around the world.

Find out more about GHD’s Transportation services at https://www.ghd.com/en/sectors/transportation.aspx